Entrepreneurship Functions Better When

question 210

Multiple Choice

Entrepreneurship functions better when

• A) patent laws are not strongly enforced since they make imitation difficult.
• B) government provides technical support to entrepreneurs.
• C) a system of private property rights permits entrepreneurs to capture the rewards from their entrepreneurial activities.
• D) universities provide research that is closely interrelated with the entrepreneurial activities.

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Definitions:

Debt And Equity

Refers to the two primary ways of financing a company's operations and growth, through borrowing (debt) or selling ownership interests (equity).

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings and dividends without needing to increase equity or borrowings.

Debt-Equity Ratio

The measure of a company's financial leverage, calculated by dividing its total liabilities by stockholders' equity.

Net Income

The overall earnings of a business following the deduction of all costs, taxes, and expenses from its gross revenue.