Which type of business, a software company or an electric utility, would benefit more from improving ROIC than from increasing growth? Why?
Answer to relevant QuestionsWhy does organic growth often create more value than growth from acquisitions? Describe how different types of organic growth might create different amounts of value. Given that TRS is not a clean measure of management performance and is therefore a flawed basis for management compensation, how should a company gauge management performance? What measures should it use? Identify and discuss real examples of companies with a competitive advantage based on customer lock-in as opposed to product innovation. Which do you expect to sustain a high ROIC for a longer time? Identify and discuss an example where growth in market share through a price war created long-term value for a company. Using economic profit calculated in Question 5 and the weighted average cost of capital computed in Question 2, value BrandCo using the economicprofit- based key value driver model. Does the calculation generate enterprise ...
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