Question

1. Which of the following are reasons why a company may start or expand international operations? (there may be more than one correct answer, identify them all)

A. To take advantage of production efficiency and lower production costs in other countries.

B. To develop new markets for its products.

C. To serve its primary customers in their international business activities.

D. Because sources of raw materials may be located in foreign countries.

E. To avoid political and regulatory hurdles.

2. A company just paid a dividend (D0) equal to $2.50 per share. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this stock is 9.00%. What is the estimated intrinsic value of the stock? Do not round intermediate calculations.

A. $102.82

B. $73.08

C. $84.98

D. $65.43

E. $93.47

3. The current assets of a company are often called ________.

A. free cash flow

B. net operating working capital

C. working capital

D. excess cash

E. net working capital

Answer 1

1.A company may start International operations because-

A)to take advantage of production efficiency and lower production cost in other countries as it can be example through manufacturing by Tesla and apple in China which offer a low manufacturing cost.

And

B) to develop new markets for its products because the firm wants to go global and get an international recognition and develop new markets.

..and

D) because the sources of its raw material maybe located in other countries like in case of Pepsico we can see it has started the business in Euthopia which is a major constituent of its raw material production country.