Which of the Following Statements Is True of Franchising

question 64

Multiple Choice

Which of the following statements is True of franchising?

• A) It offers the highest risk and requires the least investment but also has the highest potential return on investment.
• B) It offers the lowest risk and requires the least investment but also has the lowest potential return on investment.
• C) It offers the lowest risk and requires the most investment but also has the highest potential return on investment.
• D) It offers the highest risk and requires the most investment but also has the highest potential return on investment.
• E) It offers the highest risk and requires the most investment but also has the lowest potential return on investment.

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Definitions:

Stock Price

The cost of purchasing a share of a company’s stock, which fluctuates based on market conditions and the company's financial health.

Dividend Reinvestment

The process of using dividend payouts from shares to purchase additional shares in the same company, compounding the investment's growth.

Dividend Policy

A set of guidelines a company follows to decide how much of its earnings it will pay out to shareholders in dividends.

Dividend

A portion of a company's earnings that is paid to shareholders, typically on a quarterly basis.