Explain with Examples How the Political-Legal Environment of a Country

question 4

Essay

Explain with examples how the political-legal environment of a country affects a global firm.

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Definitions:

Internal Growth Rate

The maximum growth rate a firm can achieve without external financing, driven by its own operations and reinvested earnings.

Debt-Equity Ratio

A financial ratio portraying the comparative financing approach using debt and equity for assets.

Plowback Ratio

The proportion of earnings that a company retains and reinvests into its operations rather than distributing as dividends.

Dividend Payout Ratio

The fraction of net income a firm pays to its shareholders in dividends, expressed as a percentage.