Disadvantages of Joint Venturing Can Include All of the Following

question 32

Multiple Choice

Disadvantages of joint venturing can include all of the following except:

• A)joint venture partners must share rewards as well as risks.
• B)joint ventures allow partners to achieve synergy.
• C)joint ventures can have the potential for conflict between partners.
• D)a dynamic joint venture partner can evolve into a strong competitor.
• E)a company incurs very significant costs by joint venturing.

---

Definitions:

Best Efforts Underwriting

Underwriter sells as much of the issue as possible, but can return any unsold shares to the issuer without financial responsibility.

Issuing Firm

An entity, typically a corporation, that offers securities or stocks to the public for the first time, typically through an initial public offering (IPO).

Equity Share

A share of ownership in a company, which entitles the shareholder to a claim on part of the company's assets and earnings.

Private Debt

Debt financing obtained from private sources rather than through a public market, often used by companies for growth or as an alternative to bank loans.