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NEW QUESTION: 1
A. Option C
B. Option B
C. Option D
D. Option A
Answer: D
NEW QUESTION: 2
Following is a graph of the Industry Life Cycle with the names of the phases omitted.
Using the graph above, which of the following choices is INCORRECT?
A. In general, profit margins are lower in Phase A than in Phase B.
B. The infinite period dividend discount model (DDM) works well for valuing firms in Phases C and D.
C. The return on equity (ROE) on new projects is likely greater than ke for firms in Phase B.
D. For most companies, Phase C lasts the longest.
Answer: D
Explanation:
Explanation/Reference:
Explanation:
For most companies, Phase D, the Stabilization and Market Maturity Phase, lasts the longest. Phase C is the Mature Growth Phase.
The other statements are true. During Phase B, the Rapid Accelerating Growth Phase, it is likely that the firm is earning a higher return on new projects than the required rate of return. During this phase, investors likely prefer for the firm to reinvest rather than pay dividends. The infinite period DDM works well for valuing firms in Phase C, the Mature Growth Phase, and Phase D, the Stabilization and Market Maturity Phase. Remember that the infinite period DDM is most useful for a company with the following assumptions:
Phase A, the Pioneering Phase, is the start-up phase. Here, the market is small and firms incur major development costs. Sales growth is low and profit margins may be negative. In Phase B, the Rapid Accelerating Growth Phase, markets develop and demand grows exponentially. Competition is low and sales growth and profit margins are very high
NEW QUESTION: 3
A hosting company provides 10 VM web servers for a financial institution. The financial institution recently introduced a new web application and now their web traffic has significantly increased. Which of the following could the administrator implement to assist in reducing the load on the web servers?
A. Virtual switching
B. Load balancing
C. Clustering
D. Site mirroring
Answer: B
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