By Opting for Franchising Instead of Setting Up Company-Owned Branches,a

question 18

Multiple Choice

By opting for franchising instead of setting up company-owned branches,a firm most likely overcomes the problem of ________.

• A) managerial scarcity
• B) brand inconsistency
• C) inadequate service
• D) strategic control
• E) free riding

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Definitions:

Return on Common Shareholders' Equity

A measure of the profitability of equity investments, calculated as net income divided by average common shareholders' equity, indicating how well a company uses investments to generate earnings growth.

Profit Margin

A financial ratio indicating the percentage of revenue that exceeds the cost of goods sold, showcasing how much profit is generated per dollar of sales.

Dividend Yield

A financial metric showing the annual dividend payment of a company as a proportion of its stock price.

Highly Leveraged

A situation where a company or individual has taken on a high level of debt compared to its equity or assets.