Which of the Following Is Not a Condition That Favors

question 104

Multiple Choice

Which of the following is not a condition that favors the success of vertical integration?

• A)availability of capital
• B)availability of managerial talent
• C)required demand
• D)small market share
• E)the ability to operate an acquired vendor

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Definitions:

Economic Value Added

A measure of a company's financial performance based on the premise that true profit occurs when additional wealth is created for shareholders, beyond the cost of capital invested.

Cost of Capital

The rate of return a company must earn on its investments to maintain its market value and attract funds.

Use of Leverage

The practice of using borrowed money to increase the potential return of an investment, which also increases the risk of loss.

Diluting Existing Shares

A process where a company issues more shares, leading to a reduction in the ownership percentage of existing shareholders.