Firms Using a ____________ Pricing Method Set Their Prices Relative

question 57

Multiple Choice

Firms using a ____________ pricing method set their prices relative to what other firms are charging.

• A)improvement value
• B)value-based
• C)competitor-based
• D)reference-based
• E)cost-based

---

Definitions:

Debt-Equity Ratio

A financial ratio that measures the relative proportion of shareholders' equity and debt used to finance a company's assets.

Financial Risk

The chance of incurring a loss in capital in an investment or business operation.

Business Risk

The potential for losses or less-than-expected profits within the operations of a company, not related to financial debt but to the business's environment and operations.

Levered Firms

Companies that have incurred debt. Leveraging amplifies both the potential returns and risks of investments.