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renjana
Joined: 11 Jun 2015
Last visit: 06 Dec 2019
Posts: 70
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Given Kudos: 86
Location: India
Concentration: Marketing, Leadership
Schools: CMU MSPM "21 (A)
03 Jul 2018, 06:56
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A
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
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Question Stats:
25% (00:11) correct
75%
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wrong
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Five years ago, McDonald’s made a big mistake by selling off its Chipotle stake to refocus on its core products. Today Chipotle has a market cap of $9 billion (10 percent that of McDonald’s) and the revenue growth it generated during these five years would have more than doubled McDonald’s total revenue growth.
If the information given above is true, which of the following must be true?
Answer Choices
A)If the ratio of revenue to market cap for McDonald’s has remained equal to that of Chipotle in the last five years, then Chipotle has grown at a significantly faster rate than McDonald’s.
B)Chipotle’s current revenues must be less than the current revenues of McDonald’s.
C)If market cap is directly proportional to the revenue of a company, then Chipotle must have more than doubled its market cap in the last five years.
D)The ratio of revenue to market cap for McDonald’s is significantly lower than that for Chipotle.
E)If both Chipotle and McDonald’s continue to grow at the same pace, then Chipotle will have greater revenues than McDonald’s within the next 10 years.
If the information given above is true, which of the following must be true?
Answer Choices
A)If the ratio of revenue to market cap for McDonald’s has remained equal to that of Chipotle in the last five years, then Chipotle has grown at a significantly faster rate than McDonald’s.
B)Chipotle’s current revenues must be less than the current revenues of McDonald’s.
C)If market cap is directly proportional to the revenue of a company, then Chipotle must have more than doubled its market cap in the last five years.
D)The ratio of revenue to market cap for McDonald’s is significantly lower than that for Chipotle.
E)If both Chipotle and McDonald’s continue to grow at the same pace, then Chipotle will have greater revenues than McDonald’s within the next 10 years.
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renjana
Joined: 11 Jun 2015
Last visit: 06 Dec 2019
Posts: 70
Own Kudos:
Given Kudos: 86
Location: India
Concentration: Marketing, Leadership
Schools: CMU MSPM "21 (A)
03 Jul 2018, 06:59
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Bookmarks
Cannot under option 1 wrt the answer and how its related considering we have no information on Actual revenue value and considering revenue is also 10% of McDonalds how does it translate to rate of growth
