Which of the Following Is Not an Objective for a Firm

question 6

Multiple Choice

Which of the following is not an objective for a firm in preannouncing a product:

• A)create barriers to entry for competitors
• B)stimulate demand
• C)encourage customers to delay purchase from competitors
• D)get favorable tax benefits from the government
• E)help customers plan

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Definitions:

Cost of Equity

The theoretical disbursement a firm makes to its equity stakeholders as remuneration for the risk they bear by putting their capital into the business.

Dividend Growth Model

A valuation model that estimates the price of a company's stock based on the expected dividends and their growth rate.

After-tax Cost

The cost of an investment or expense after the effects of income tax have been taken into account.

Required Return

The minimum return that investors expect or require from an investment to compensate for its risk.