The Main Difference Between an Equity and a Nonequity Alliance

question 20

Multiple Choice

The main difference between an equity and a nonequity alliance is that

• A) equity alliances are restricted to two partners while nonequity alliances may have any number of partners involved.
• B) while equity alliances involve ownership, nonequity alliances are contractual relationships without ownership.
• C) equity alliances require that each partner own an equal percentage of the new organization that is formed, while nonequity alliances involve unequal proportions of ownership between partners.
• D) equity alliances are allowed between U.S. firms, but U.S. firms must make nonequity alliances with international firms.

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Definitions:

Equally Likely

A principle in probability stating that all outcomes of a random event have the same chance of occurring if the event is fair.

Record

A record is a documented account of an event, transaction, or other significant information, stored in written, audio, or digital form.

Smaller Number

A value or quantity that is less than another in a given set or range of numbers.

Fair 6-Sided Dice

Refers to an equally balanced die where each of the six faces, numbered from 1 to 6, has an equal probability of landing face up when thrown.