The Most Important Element in Determining Whether and How a Firm

question 37

Multiple Choice

The most important element in determining whether and how a firm should expand overseas is

• A)the degree of government subsidies and protection provided
• B)whether the firm's competitive advantages can be transferred abroad and how this can best be done
• C)the correlation between the domestic and world economies
• D)the extent of political risk overseas

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Definitions:

Investment Grade

A rating that indicates a low to moderate risk of default for bonds and other securities, suggesting they are a secure investment.

Bond Ratings

Assessments assigned by rating agencies indicating the credit quality and risk level of bonds, with ratings ranging from high-grade (low risk) to high-yield (high risk).

No Par Value Stock

Shares issued without a nominal or face value, where the value of the stock is determined by the price investors are willing to pay for it in the market.

Stated Capital

The amount of capital reported by a company that represents the par value of the stock that has been issued and is often used in legal terms to determine how much capital the company can legally declare as dividends.