If Capital Gain Rises, a Firm Should

question 47

Multiple Choice

If capital gain rises, a firm should:

• A) consider shutting down.
• B) invest in financial assets, like stocks.
• C) invest in more capital.
• D) lower its output prices.
• E) lay off some of its workers.

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Definitions:

Divestiture

The process of selling off subsidiary business interests or investments by a company to refocus its operations or to raise capital.

Core Competencies

Fundamental strengths or advantages of a business or organization that set it apart from competitors.

Turnaround

A process or strategy aimed at recovering a company from a period of poor performance and financial decline to achieve positive financial results and operational efficiency.

Performance Problems

Issues related to an individual's or group's inability to meet established standards or goals in work or project outcomes.