A Concentration Ratio Can Be Used to Measure

question 66

Multiple Choice

A concentration ratio can be used to measure:

• A)whether a few large companies in a certain industry possess significant market power
• B)the size of a specific industry
• C)the benefits to consumers of market domination by one company
• D)how elastic a market demand curve will be
• E)how inelastic a market demand curve will be

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Definitions:

Target Capital Structure

The combination of borrowing, ownership stakes, and additional financing methods a business intends to employ for its operational and expansion activities.

Target Dividend Payout

A company's goal or policy regarding the percentage of earnings it aims to pay out to shareholders in the form of dividends.

Positive NPV Projects

Projects for which the Net Present Value (NPV) is greater than zero, indicating that they are expected to generate a profit above the cost of capital.

Capital Budget

A budget allocating money for the acquisition or maintenance of fixed assets such as buildings, machinery, and equipment.