Which Method of Entering the Global Marketplace Would Be Most

question 66

Multiple Choice

Which method of entering the global marketplace would be most risky?

• A) licensing
• B) direct investment
• C) contract manufacturing
• D) joint ventures
• E) exporting

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Definitions:

Debt/Equity Ratio

The indicator that compares the role of debt and equity in financing company assets.

Financial Leverage

The use of borrowed money to increase the potential return of an investment, which also increases the risk of loss.

M&M Proposition

The Modigliani-Miller Proposition argues that in an ideal market, the value of a firm is unaffected by how it is financed, whether through debt or equity.