Under which of the following condition is a firm likely to pursue backward integration?
A. There are a small number of suppliers
B. A significant investment is needed to facilitate the specific transaction with suppliers (i.e., asset specificity)
C. A firm needs to procure supplies at a very high frequency
D. All of the above
Ans: D. All of the above
Business
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A firm has a retention ratio of 45 percent and a sustainable growth rate of 6.2 percent. The capital intensity ratio is 1.2 and the debt-equity ratio is 0.64. What is the profit margin?
A. 6.28 percent B. 7.67 percent C. 9.47 percent D. 12.38 percent E. 14.63 percent
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A growth strategy to develop an untapped new-market potential offers both high risk and the possibility of high return
Indicate whether the statement is true or false
Business