With Reference to High-Technology Industries, Which of the Following Statements

question 24

Multiple Choice

With reference to high-technology industries, which of the following statements is true about technical standards?

• A) They emerge because there are economic benefits associated with them.
• B) They cause compatibility problems between products and their complements.
• C) They can create a lot of confusion in the minds of consumers.
• D) They often result in higher production costs.
• E) They increase the risks associated with supplying complementary products.

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Definitions:

Earnings Retention Ratio

The earnings retention ratio, also known as the plowback ratio, measures the percentage of net income that is retained in the company rather than being paid out as dividends.

Market Capitalization Rate

Market capitalization rate, or "cap rate", is used in evaluating and comparing the expected returns on investments in the equity market, reflecting the cost of capital for a company.

P/E Ratio

The price-to-earnings ratio, a valuation metric calculated by dividing the current market price of a stock by its earnings per share.

Dividend Plowback Ratio

The portion of a company's earnings that is not distributed as dividends but is reinvested in the business, also known as the retention rate.