BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

STRATEGIC MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
High returns to customers might come at the expense of lower returns for capital market stakeholders.
A
True
B
False
Explanation: 

Detailed explanation-1: -Capital-market stakeholders are groups that affect the availability or cost of capital-shareholders, venture capitalists, banks, and other financial intermediaries. Product-market stakeholders include parties with whom the firm shares its industry, including suppliers and customers.

Detailed explanation-2: -Return. The return is the total income an investor gets from his/her investment every year and is usually quoted as a percentage of the original value of the investment. Usually the investor gets a return on his /her investment in shares or investment portfolio when they distribute dividends.

Detailed explanation-3: -Cost of Capital is the expected returns from a project, based on which the management of an organisation decides to invest in a project. It evaluates the risk of undertaking a particular project, and the expected rate of return on the investment, to determine the feasibility of spending their time and money on it.

Detailed explanation-4: -The cost of capital refers to the expected returns on the securities issued by a company. The required rate of return is the return premium required on investments to justify the risk taken by the investor.

There is 1 question to complete.