For a given incremental increase in revenue from each of the following sources of growth, which...

For a given incremental increase in revenue from each of the following sources of growth, which would generally create the most shareholder value?

a. Reducing costs.

b. Acquiring businesses.

c. Expanding an existing market.

d. Introducing new products to market.

Solutions

Expert Solution

Acquiring business, expanding an existing Market and introducing new product to market is not necessarily meant that it will increase profits and cash flows and ultimately shareholders value. If wrong decision is made regarding any of above strategy, it may have losses and shareholders value may destroyed.

But with increase of revenue, if cost is reduced it will surely adds to profit and ultimately it will increase shareholders value.

So answer is a, reducing costs

jeff jeffy answered 2 years ago

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