Which of the Following Is a Disadvantage of Equity Alliances

question 16

Multiple Choice

Which of the following is a disadvantage of equity alliances?

• A) They are reflective of weaker ties between firms.
• B) They do not permit the exchange of explicit knowledge.
• C) They can bring about a lack of commitment.
• D) They can entail significant investments.

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Definitions:

Double Taxation

A situation in which the same income is taxed twice; this often occurs with corporate income taxes where earnings are taxed at the corporate level and again when distributed as dividends to shareholders.

Start-Up Investment

Start-up investment refers to the initial capital required to start a new business, including costs for product development, market research, and operational expenses.

Sole Proprietorship

A business structure in which a single individual owns and operates the business, bearing sole responsibility for its debts and liabilities.

UPA

Stands for Uniform Partnership Act, which is a set of laws adopted by various states in the United States that governs partnerships.