In the Long Run, an Industry Can Expand When Existing

question 81

True/False

In the long run, an industry can expand when existing firms expand by investing in new capital.

Acknowledge the significance of including both positively and negatively worded items in scale construction for balanced measurement.

Realize the importance of validation techniques such as item analysis, content analysis, and expert consultation.

Understand the role of validity (convergent, discriminant, empirical) in the context of scale development and the methods for establishing it.

Recognize the necessity of cross-cultural validation processes for scales intended for use in different cultural contexts.

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Definitions:

Total Dividends

The sum of all dividend payments made by a company to its shareholders over a specified period, usually a fiscal year.

Residual Dividend Policy

A policy wherein dividends are based on the earnings left over after all operating expenses and expansion projects are funded.

Target Capital Structure

The optimal mix of debt, equity, and other securities that a firm aims to hold, which minimizes its cost of capital and maximizes its stock price.

Capital Budget

Planning for the acquisition and use of long-term assets to achieve a company’s strategic goals.