Question

Which of the following usually result in above-average value creation? I. Make large acquisitions. II. Attract...

Which of the following usually result in above-average value creation?

I. Make large acquisitions.

II. Attract new customers into the market.

III. Convince existing customers to buy more of a product.

IV. Make bolt-on acquisitions to accelerate product growth

a.

I and II only.

b.

II and III only.

c.

I, III, and IV only.

d.

II, III, and IV only.

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Homework Answers

Answer #1

When the company will be trying to attract new customers into the existing market and it will also trying to convince the existing customer to buy more product, it will be leading to result into above average value creation,because it will be able to outperform itself in the past.

Making large acquisitions and making bolt-on acquisitions to accelerate product growth will also be involving higher capital and they are not providing for resulting in above average value creation.

Correct answer will be option (B) II and III only.

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