Imperfections in the Market for Intangible Assets Can Also Play

question 47

Multiple Choice

Imperfections in the market for intangible assets can also play a major role in motivating firms to undertake cross-border acquisitions. According to the internalization theory,

• A)cross-border acquisitions may also be motivated by the acquirer's desire to acquire and internalize the target firm's intangible assets.
• B)a firm with intangible assets that have a public good property such as technical and managerial know-how may acquire foreign firms as a platform for using its special assets on a larger scale and, at the same time, avoid the misappropriation that may occur while transacting in foreign markets through a market mechanism.
• C)the internalization thus may proceed forward to internalize the acquirer's assets, or backward to internalize the target's assets.
• D)all of the above

Differentiate between different types of financial analyses and their specific uses.

Conduct vertical analysis on financial statements.

Calculate ratios and understand their significance in financial analysis.

Develop a clear understanding of financial statement components through comparative and common-size analyses.

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Definitions:

Authoritarian Leadership

Demands strict compliance from subordinates. Authoritarian leaders are most effective in a crisis such as a war or the emergency room of a hospital.

Social Groups

are collections of individuals who interact with each other based on shared interests, beliefs, or characteristics, forming a sense of unity and identity.

Groupthink

A phenomenon where a group's desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Triad

A social relationship among three “nodes,” or social units (e.g., people, firms, organizations, countries, etc.).