Question 121 ptsA company can increase enterprise value by: Group of answer choicesspacing liabilitiesmanaging solvencyreducing liquiditydelivering top service

A company can increase enterprise value by delivering top service.

Here's why:

1. Delivering top service leads to customer satisfaction: When a company consistently delivers high-quality service, it leads to customer satisfaction. Satisfied customers are more likely to stay loyal to the company, leading to repeat business.

2. It enhances the company's reputation: Top service can enhance a company's reputation, making it more attractive to potential customers, partners, and investors. This can lead to increased market share and investment, thereby increasing the company's enterprise value.

3. It can lead to referrals: Satisfied customers are more likely to refer others to the company, leading to new business without the company having to spend a lot on marketing. This can increase the company's revenue and, by extension, its enterprise value.

4. It can reduce customer churn: By delivering top service, a company can reduce customer churn, which is the rate at which customers stop doing business with a company. A lower churn rate can lead to more stable revenue and higher enterprise value.

So, while managing solvency and liquidity are important for a company's financial health, they don't directly lead to an increase in enterprise value. On the other hand, delivering top service can directly and positively impact a company's enterprise value.