If the Coca-Cola Company Allows a Mexican Firm to Use

question 50

Multiple Choice

If the Coca-Cola Company allows a Mexican firm to use its name,formula,and brands in return for a royalty,then this arrangement would be known as:

• A)exporting.
• B)licensing.
• C)direct investment.
• D)contract manufacturing.
• E)a joint venture.

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Definitions:

Conversion Value

The monetary value of a convertible security (such as a convertible bond) if it were converted into a predetermined number of shares of common stock, generally at the discretion of the holder.

Par Value

The face value of a bond or stock, as stated on the certificate, which is the minimum stated value.

Convertible Debentures

Bonds that can be converted into a predetermined amount of the issuing company's equity at certain times during their life, usually at the discretion of the bondholder.

Conversion Price

The predetermined price at which convertible security, such as a bond or preferred stock, can be converted into a specified number of shares of common stock.