The Term "Cannibalization" Refers to ________

question 18

Multiple Choice

The term "cannibalization" refers to ________.

• A) decrease in the sales of current project caused by the launching of new project
• B) decrease in the sunk cost caused by launching of new project
• C) decrease in overhead expenses incurred due to launch of new project
• D) cost of using a resource for the best value it could provide in its best alternative

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Definitions:

Plowback Ratio

A metric indicating the percentage of earnings retained by a company after dividends have been paid out to shareholders.

P/E Ratio

A valuation metric that compares the current share price of a company to its per-share earnings.

Constant-Growth DDM

A valuation method that estimates the value of a stock by using its expected dividends, which grow at a constant rate indefinitely.

Intrinsic Value

The actual, inherent value of an asset, without respect to market value or external factors.