Which of the Following Is an Advantage of International Licensing

question 62

Multiple Choice

Which of the following is an advantage of international licensing?

• A) It enables the company realize scale economies and location economies through manufacturing products in a centralized location.
• B) It allows the company  to collect profits from one licensee and use it to support others.
• C) It eliminates the risk of losing control over a technology that the company owns.
• D) It enables the company to coordinate its strategy efficiently to achieve competitive advantage.
• E) It takes away the pressure of development costs and risks associated with opening up a foreign market from the company.

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Definitions:

Rate of Return

The increase or decrease in the value of an investment throughout a certain period, represented as a fraction of the original investment's price.

EPS

Earnings Per Share, indicating the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company’s profitability.

Preferred Stock

A class of stock that offers certain advantages over common stock, typically including fixed dividend payments and priority over common stock in asset liquidation.

Rate of Return

The advancement or decline in an investment’s worth over a stipulated period, framed as a percentage of the original investment amount.