Which of the Following Is a Disadvantage of Licensing

question 56

Multiple Choice

Which of the following is a disadvantage of licensing?

• A) Licensing is a complex way for a manufacturer to enter international marketing.
• B) The licensor potentially creates a competitor in the form of the licensee.
• C) It takes a lot of time for the licensee to gain production expertise and name.
• D) The licensing company gains entry into a foreign market at a high risk.
• E) The licensee is restricted from gaining knowledge about the licensor's intellectual property.

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Definitions:

Par Value

The nominal or face value of a stock or bond, as stated by the issuing corporation.

Dividends

Payments made by a corporation to its shareholders, typically from profits, as a return on investment.

Corporate Income

The total income of a corporation derived from its operations and investments, subject to corporate taxes.

Stockholders

Individuals or entities that own shares in a corporation, granting them certain rights and potentially a share in the company’s profits.