Companies That Own Industry Standards Earn About the Same Returns

question 57

True/False

Companies that own industry standards earn about the same returns as those companies with other competitive advantages.

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Definitions:

Preferred Stockholders

Investors who own shares of preferred stock in a company, typically entitled to dividends before common stockholders and having priority in assets upon liquidation.

Board Of Directors

A group of individuals elected by shareholders to oversee and make strategic decisions for a corporation.

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Contra Account

An account used in accounting to reduce the value of a related account when the two are netted together, providing a clearer picture of financial status.