Reactive firms do not consider exporting until their domestic market is saturated
Indicate whether the statement is true or false.
TRUE
Reactive firms do not even consider exporting until their domestic market is saturated and the emergence of excess productive capacity at home forces them to look for growth opportunities in foreign markets.
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McDonald's success in franchising in global markets can be attributed to several factors which do not include:
A) a well known global brand name. B) a business system that can be easily replicated. C) local market knowledge. D) cross licensing. E) granting franchisees leeway to tailor menu offerings to suit local tastes.
Landry Corp. is looking at two possible capital structures. Currently, the firm is an all-equity firm with $1.2 million dollars in assets and 200,000 shares outstanding. The market value of each stock is $6.00
The CEO of Landry is thinking of leveraging the firm by selling $600,000 of debt financing and retiring 100,000 shares, leaving 100,000 outstanding. The cost of debt is 10% annually, and the current corporate tax rate for Landry is 30%. If the CEO believes that Landry's EBIT will be $120,000, should the CEO leverage the firm? Explain. What will be an ideal response?