Chapter 4 – Define the playing field properly (3/3)

Chapter 4 – Defining the playing field (3/3)

Understanding life cycles

Every business has a life cycle. Understanding its characteristics is a great strategic asset

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(Company valuation – the price earning ratio)!

 33%

1.

In a growing market, what should be done with the dividend?

Increase it

Decrease it

2.

In a shrinking market, what is the best financial strategy?

Reduce the debt and the dividend

Reduce the debt and increase the dividend

Reduce the debt and the dividend

3.

In a declining market, what is the best business strategy?

Increasing prices

Lowering prices

Keeping stable prices

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