The CFO of Google Believes That Its Greatest Strategic Goal

question 4

Multiple Choice

The CFO of Google believes that its greatest strategic goal is to maintain flexibility.To achieve this goal,which of the following financial structures is in place at Google?

• A)Google has issued significantly more long-term debt than equity (common shares) because debt has a significantly lower after-tax cost.
• B)Google has issued significantly more equity (common shares) to avoid the restrictions that debt would imposed through restrictive covenants.
• C)Google holds large amounts of cash and short-term investments in spite of the opportunity loss resulting from low investment earnings.
• D)Google maintains a dividend payout ratio in line with other firms in the industry to ensure that its common shares are attractive to investors.

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Definitions:

Formal Retreat

A strategic decision by a company to withdraw from certain markets, products, or services as a conscious business choice.

Continuous Improvement

An ongoing effort to improve products, services, or processes by making small, incremental changes.

Outdoor Experience

A form of experiential learning outside traditional indoor settings, often involving activities that connect participants with nature.

Decision Making

The process of selecting a course of action from among multiple alternatives.