One of the Advantages of Direct Ownership Is That the Firm

question 46

Multiple Choice

One of the advantages of direct ownership is that the firm has

• A) monetary back-up from venture capitalists.
• B) immediate access to foreign markets.
• C) no problems relating to export duties or import regulations.
• D) management teams made up of foreign nationals as having teams made up of locals are not legally allowed.

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Definitions:

Total Equity

The residual interest in the assets of an entity after deducting liabilities; essentially, it represents the ownership value in the firm.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively management is using a company’s assets to create profits.

Total Debt Ratio

A financial metric that compares the total amount of a company's debt to its total assets, indicating the extent to which a company's operations are financed by debt.

Net Working Capital Turnover

A measure of how effectively a company is using its net working capital to generate sales.