According to the Text, Which One of the Following Is

question 82

Multiple Choice

According to the text, which one of the following is NOT one of the reasons why innovations seem to occur more often in small firms rather than in large, established corporations?

• A) An entrepreneur in a small firm is more willing to accept greater risk than would a larger firm of diversified ownership.
• B) Small firms are completely ignorant of risk management.
• C) The greater the assets involved and the longer they are tied up, the more likely top management in large firms is to demand a high probability of success.
• D) Companies operating in global industries must deal with a greater amount of risk than firms operating only in one country.
• E) If the corporation's stock is widely held as in the case of large firms and experiences stock price declines due to some external assessment, it places the firm in jeopardy of being acquired.

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Definitions:

Voting Stock

Shares that give the holder the right to vote on company matters, such as electing the board of directors.

Contingent Payment

A payment that is not guaranteed but depends on the occurrence of a certain event or condition in the future.

Cash Flows

The complete sum of funds moving into and out of an enterprise, predominantly affecting its ability to cover short-term obligations.