The Causal View of an Industry Is That

question 107

Multiple Choice

The causal view of an industry is that:

• A) market structure causes firms to behave in a certain way.
• B) market performance causes firms to have a certain structure.
• C) market performance causes firms to behave in a certain way.
• D) behavior causes firms to have a certain structure.

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Definitions:

Quarterly Dividend

A dividend payment made by a company to its shareholders four times a year, typically every three months.

Flotation Costs

The costs associated with issuing new securities, including underwriting, legal, and registration fees, which are incurred by a company when it issues new stocks or bonds.

New Equity

Refers to the issuance of shares by a company to raise capital, which dilutes existing ownership but can provide funds for expansion or debt reduction.

Constant Growth

A steady and unchanging rate at which the value or size of something increases over a specific period.