What is the difference between a brownfield strategy and a greenfield strategy? Do you think one strategy is better than the other? Explain
What will be an ideal response?
A brownfield strategy involves buying existing assets in a foreign country. The greenfield strategy involves starting a new operation from scratch (the word greenfield arises from the image of starting with a virgin green site and then building on it). The firm buys or leases land, constructs new facilities, hires and/or transfers in managers and employees, and then launches the new operation.
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Which term best describes the extent to which companies' operations are based on the use of large-scale equipment?
A) manufacturing capital intensity B) human capital intensity C) capital intensity D) financial capital intensity
Cherry Auto Sales just opened and does not expect to pay a dividend during its first year. At the end of its second year, Cherry's owners expect to pay a $2.00 dividend and plan to increase it 7% annually
If the required return is 20%, what should Cherry's stock price be? A) $11.42 B) $10.92 C) $13.06 D) $12.82 E) $15.48