Only rapidly growing firms have growth management problems. False. All firms have problems with growth regardless of their size. The chapter emphasized how slow-growth companies often have subtle and often more serious growth problems. Larger companies tend to have more diversified business so that when one area Of the firm Starts to slide, generally another area is remaining steady or experiencing growth. Smaller companies don’t have as much ability to diversify and usually have sales in a single market area. This makes market issues harder for company growth. F. Increase growth increases stock prices.
False. It would depend on if it was good or bad growth that was occurring. Good growth that is yielding returns above the current cost will help to increase the stock price while bad growth has a reverse effect. 5. Look at Figure 4. 5, describe the trend in net equity financing in the U. S. During the last 30 years. What does this say about the use of equity financing in U. S. Corporations? In 1983 the net equity issues grew, and then they sharply dropped and have remained negative ever since. What this means is that U. S. Corporations have retired more shares then they have issued.
Companies took advantage of these healthy internal cash flows and low borrowing rates to repurchase their shares. With the current trends that we are facing in our economy today it appears that companies will soon be back to financing their internal growth with the use of company equity. 8. Genetic Inc. Is a California-based biotech pioneer recently acquired by Swiss pharmaceutical giant Ruche Holding GAG. Ruche paid $46. 8 billion in cash for the 44 percent of Genetic it did not already own, implying a market value of over $100 billion for the entire company. For a look at