Question
Investment bank Canaccord's Think Childcare (TNK) initiation of coverage states: TNK reported an impressive set of results following its first full year as a listed
Investment bank Canaccord's Think Childcare (TNK) initiation of coverage states: "TNK reported an impressive set of results following its first full year as a listed entity. Revenue of $46.5m was 7% above prospectus forecasts of $43.4m; however, the company acquired two centres during the year. On a like-for-like basis (backing out the acquisitions), revenue still came in 5% above the prospectus forecasts, at $45.5m."
Which of the following statements is NOT correct? It's important to assess how much performance exceeded forecasts on a like-for-like basis since:
Select one:
a.Expansion through acquisitions is typically more costly than organic expansion.
b.Successful word-of-mouth customer recommendations and advertising are less risky and more sustainable sources of growth compared to acquisitions.
c.Organic and acquisition-led growth both typically require extra external funding.
d.Acquisitions typically require a takeover premium which runs the risk of making them negative NPV investments.
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