The segmented market exposed Novo to a problem of the low capital availability high cost of equity, and this led to a higher cost of capital compared to the cross-boundary competitors like Eli Lilly and Gist-Brocades among others. The situation thus weakened the firm to the benefit of the rivals. Novo also became …
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One of the major impact of being in a segmented marketed was Novo’s price/earing ratio was typically around 5, but it’s foreign competitors were well over 10. Meanwhile Novo’s business and financial risk appeared the same as its competitor.
The Novo’s relatively high costs of capital create a competitive disadvantage because with the high cost a Novo could not make research. 11. Novo Industri (B). Novo believed that the Danish capital market was segmented from world capita characteristics of the Danish equity market that were responsible for its segmentation.
Danish securities market was both illiquid and segmented from other capital markets which drove Novo to internationalize to expand revenue outsides of Denmark’s market. One of the major impact of being in a segmented marketed was Novo’s price/earing ratio was typically around 5, but it’s foreign competitors were well over 10.
They observed the price earnings ratio of Novo industries was lower than the price earnings of its compe he domestic equity market was saturated due to which they could not borrow well. The Novo’s relatively high costs of capital create a competitive disadvantage because with the high cost a Novo could not make research. 11. Novo Industri (B).
What were the impacts on Novo as a result of operating in a segmented market?
Question One: What were the impacts on Novo as a result of operating in a segmented market?