PepsiCo Purchased KFC So That It Could Replace Coke Products

question 82

Multiple Choice

PepsiCo purchased KFC so that it could replace Coke products with Pepsi products in KFC restaurants.This is an example of which of the following strategies?

• A) Horizontal integration
• B) Vertical integration
• C) Low-cost strategy
• D) Global strategy
• E) Diversification strategy

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Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without increasing its financial leverage.

Debt to Equity Ratio

The ratio showing the variance in financing methods between debt and equity for a company’s assets.

Dividend Payout Ratio

The fraction of net income a firm pays to its shareholders as dividends, expressed as a percentage of the company's total earnings.

Retention Ratio

A financial metric indicating the percentage of a company's net income that is not distributed as dividends but rather retained for reinvestment in the business.