Question 1

Which of the following is most accurate concerning corporate growth rates?

Accepted Answer

A) High growth rates decay quickly,and large companies struggle to grow. 
B) High growth rates are sustainable for 10 years or more,but large companies struggle to grow. 
C) High growth rates decay quickly,but large companies grow more easily than small companies. 
D) High growth rates are sustainable for 10 years or more,and large companies grow more easily than small companies. 
A) High growth rates decay quickly,and large companies struggle to grow. 
B) High growth rates are sustainable for 10 years or more,but large companies struggle to grow. 
C) High growth rates decay quickly,but large companies grow more easily than small companies. 
D) High growth rates are sustainable for 10 years or more,and large companies grow more easily than small companies. A

Question 2

Which of the following is true concerning an increase in market share that comes at the expense of established competitors?

Accepted Answer

A) It rarely creates much value for long,except when it results in pushing a competitor out of the market completely. 
B) It generally creates value for a fairly long period,but it will decay after about 10 years. 
C) It never creates any value over the long run because the effects are random across firms and net to zero for any given firm over time. 
D) None of these. 
A) It rarely creates much value for long,except when it results in pushing a competitor out of the market completely. 
B) It generally creates value for a fairly long period,but it will decay after about 10 years. 
C) It never creates any value over the long run because the effects are random across firms and net to zero for any given firm over time. 
D) None of these. A

Question 3

The only way to achieve consistently high growth is to consistently find new product markets and enter them successfully in time to enjoy their more profitable high-growth phase.

Accepted Answer

A) True 
 B)False  True

Question 4

Average industry revenue growth varies considerably across industries,but the growth rates among companies in the same industry are fairly uniform.

Accepted Answer

A) True 
 B)False

Question 5

For firms that grew at rates less than 5 percent in the 2000-2003 period,what percentage grew at rates greater than 10 percent in the 2010-2013 period?

Accepted Answer

A) 44 percent. 
B) 15 percent. 
C) 13 percent. 
D) 28 percent. 
A) 44 percent. 
B) 15 percent. 
C) 13 percent. 
D) 28 percent.

Question 6

Companies that grow more slowly than 0 percent in one year generally within five years see their growth increase to:

Accepted Answer

A) About 4 percent and then up to 4.5 percent within 10 years. 
B) About 1 percent and then up to 2 percent within 10 years. 
C) About 6 percent and then up to 8 percent within 10 years. 
D) About 8 percent and then up to 10 percent within 10 years. 
A) About 4 percent and then up to 4.5 percent within 10 years. 
B) About 1 percent and then up to 2 percent within 10 years. 
C) About 6 percent and then up to 8 percent within 10 years. 
D) About 8 percent and then up to 10 percent within 10 years.

Question 7

Which of the following explain the reasons that growth-rate rankings change among industries so much over time?
I.The business cycle.
II.Changing regulations.
III.Fluctuating exchange rates.
IV.Product life cycles.

Accepted Answer

A) I and II only. 
B) I and IV only. 
C) II and III only. 
D) III and IV only. 
A) I and II only. 
B) I and IV only. 
C) II and III only. 
D) III and IV only.

Question 8

While the pace of growth can vary greatly across products,the pattern of growth is usually the same for almost all products and services.

Accepted Answer

A) True 
 B)False

Question 9

Companies in which of the following industries or sectors have had the lowest growth rates?

Accepted Answer

A) Software. 
B) IT services. 
C) Automobiles. 
D) Health-care equipment. 
A) Software. 
B) IT services. 
C) Automobiles. 
D) Health-care equipment.

Question 10

Companies that grow faster than 30 percent in one year generally within five years see their growth decline to:

Accepted Answer

A) About 4 percent and then down to 2 percent within 10 years. 
B) About 12 percent and then down to 10 percent within 10 years. 
C) About 10 percent and then down to 8 percent within 10 years. 
D) About 8 percent and then down to 6 percent within 10 years. 
A) About 4 percent and then down to 2 percent within 10 years. 
B) About 12 percent and then down to 10 percent within 10 years. 
C) About 10 percent and then down to 8 percent within 10 years. 
D) About 8 percent and then down to 6 percent within 10 years.

Question 11

Which of the following is LEAST likely to result in above-average,long-run value creation?

Accepted Answer

A) Create new markets through new products. 
B) Attract new customers into the market. 
C) Convince existing customers to buy more of a product. 
D) Gain market share from rivals through product promotion. 
A) Create new markets through new products. 
B) Attract new customers into the market. 
C) Convince existing customers to buy more of a product. 
D) Gain market share from rivals through product promotion.

Question 12

If a company increases its market share because of a product having momentum,it can be said that growth was generated via portfolio momentum.

Accepted Answer

A) True 
 B)False

Question 13

The strategy of making bolt-on acquisitions to accelerate product sales:

Accepted Answer

A) Has not been proven to create value. 
B) Can create positive and about average value compared to other strategies. 
C) Can create positive and above-average value compared to other strategies. 
D) Can create positive but below-average value compared to other strategies. 
A) Has not been proven to create value. 
B) Can create positive and about average value compared to other strategies. 
C) Can create positive and above-average value compared to other strategies. 
D) Can create positive but below-average value compared to other strategies.

Question 14

For which situation does additional growth likely create more value?

Accepted Answer

A) High-ROIC company in a mature market. 
B) Low-ROIC company in a fast-growing market. 
C) Low-ROIC company in a mature market. 
D) Medium-ROIC company in a mature market. 
A) High-ROIC company in a mature market. 
B) Low-ROIC company in a fast-growing market. 
C) Low-ROIC company in a mature market. 
D) Medium-ROIC company in a mature market.

Question 15

Explain the "portfolio treadmill" effect and what it means for a firm that wishes to sustain growth.

Accepted Answer

Ultimately,a company's growth and size a

Question 16

For firms that grew at rates greater than 15 percent in the 2000-2003 period,what percentage grew at rates less than 10 percent in the 2010-2013 period?

Accepted Answer

A) 58 percent. 
B) 37 percent. 
C) 21 percent. 
D) 42 percent. 
A) 58 percent. 
B) 37 percent. 
C) 21 percent. 
D) 42 percent.

Question 17

Incremental innovation will rarely create lasting value.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following are types of organic revenue growth?
I.Mergers.
II.Acquisitions.
III.Portfolio momentum.
IV.Market share performance.

Accepted Answer

A) I and II only. 
B) I,II,and III only. 
C) II and IV only. 
D) III and IV only. 
A) I and II only. 
B) I,II,and III only. 
C) II and IV only. 
D) III and IV only.

Question 19

Which of the following usually result in above-average value creation?
I.Make large acquisitions.
II.Attract new customers into the market.
III.Convince existing customers to buy more of a product.
IV.Make bolt-on acquisitions to accelerate product growth.

Accepted Answer

A) I and II only. 
B) I,III,and IV only. 
C) II and III only. 
D) II,III,and IV only. 
A) I and II only. 
B) I,III,and IV only. 
C) II and III only. 
D) II,III,and IV only.

Question 20

Which of the following is most accurate concerning the median revenue growth rates of firms over the years 1965 to 2013?

Accepted Answer

A) The range was 1.5 percent to 12 percent,with a median of 7.2 percent. 
B) The range was 0 percent to 9 percent,with a median of 5.3 percent. 
C) The range was 2.2 percent to 8.8 percent,with a median of 4.2 percent. 
D) The range was -0.2 percent to 6.6 percent,with a median of 3.3 percent. 
A) The range was 1.5 percent to 12 percent,with a median of 7.2 percent. 
B) The range was 0 percent to 9 percent,with a median of 5.3 percent. 
C) The range was 2.2 percent to 8.8 percent,with a median of 4.2 percent. 
D) The range was -0.2 percent to 6.6 percent,with a median of 3.3 percent.

Exam 7: Growth

Which of the following is most accurate concerning corporate growth rates?

Which of the following is true concerning an increase in market share that comes at the expense of established competitors?

The only way to achieve consistently high growth is to consistently find new product markets and enter them successfully in time to enjoy their more profitable high-growth phase.

Average industry revenue growth varies considerably across industries,but the growth rates among companies in the same industry are fairly uniform.

For firms that grew at rates less than 5 percent in the 2000-2003 period,what percentage grew at rates greater than 10 percent in the 2010-2013 period?

Companies that grow more slowly than 0 percent in one year generally within five years see their growth increase to:

Which of the following explain the reasons that growth-rate rankings change among industries so much over time? I.The business cycle. II.Changing regulations. III.Fluctuating exchange rates. IV.Product life cycles.

While the pace of growth can vary greatly across products,the pattern of growth is usually the same for almost all products and services.

Companies in which of the following industries or sectors have had the lowest growth rates?

Companies that grow faster than 30 percent in one year generally within five years see their growth decline to:

Which of the following is LEAST likely to result in above-average,long-run value creation?

If a company increases its market share because of a product having momentum,it can be said that growth was generated via portfolio momentum.

The strategy of making bolt-on acquisitions to accelerate product sales:

For which situation does additional growth likely create more value?

Explain the "portfolio treadmill" effect and what it means for a firm that wishes to sustain growth.

For firms that grew at rates greater than 15 percent in the 2000-2003 period,what percentage grew at rates less than 10 percent in the 2010-2013 period?

Incremental innovation will rarely create lasting value.

Which of the following are types of organic revenue growth? I.Mergers. II.Acquisitions. III.Portfolio momentum. IV.Market share performance.

Which of the following usually result in above-average value creation? I.Make large acquisitions. II.Attract new customers into the market. III.Convince existing customers to buy more of a product. IV.Make bolt-on acquisitions to accelerate product growth.

Which of the following is most accurate concerning the median revenue growth rates of firms over the years 1965 to 2013?

Why Value Value

Fundamental Principles of Value Creation

Conservation of Value and the Role of Risk

The Alchemy of Stock Market Performance

The Stock Market Is Smarter Than You Think

Return on Invested Capital

Frameworks for Valuation

Reorganizing the Financial Statements

Analyzing Performance

Forecasting Performance

Estimating Continuing Value

Estimating the Cost of Capital

Moving From Enterprise Value to Value Per Share

Analyzing the Results

Using Multiples

Valuation by Parts

Taxes

Non-operating Items, Provisions, and Reserves

Leases and Retirement Obligations

Alternative Ways to Measure Return on Capital

Inflation

Cross-Border Valuation

Case Study: Heineken

Corporate Portfolio Strategy

Performance Management

Mergers and Acquisitions

Divestitures

Capital Structure, Dividends, and Share Repurchases

Investor Communications

Emerging Markets

Valuing High-Growth Companies

Cyclical Companies

Banks

Flexibility

Filters