The Basic Motivation of Multinational Companies, as with All Businesses

question 26

Multiple Choice

The basic motivation of multinational companies, as with all businesses is to:

• A)be more sensitive to customer needs.
• B)increase profitability.
• C)maintain their consumer base.
• D)minimize risk.
• E)increase goodwill.

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Definitions:

Internal Growth Rate

The maximum rate at which a company can expand using only internal financing sources, without external financing.

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, expressed as a percentage of the company's total earnings.

Retention Ratio

The proportion of net income that is retained by a company rather than distributed to its shareholders as dividends, indicating how much profit is reinvested.

Net Income

The amount of money remaining after all operating expenses, taxes, and interest have been deducted from total revenue.