In a Licensing Agreement, the Licensee

question 190

Multiple Choice

In a licensing agreement, the licensee

• A) makes no initial investment to get started.
• B) does most of the marketing strategy planning for the markets it is licensed to serve.
• C) has more control over marketing than other approaches for entering international markets.
• D) assumes almost no risk in a foreign market.
• E) does not pay any fee or royalties to the licensor.

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Definitions:

Sale of Stock

This refers to the process of selling shares of a company to investors; this can be done via public offerings or through private sales.

Tax Avoidance

Tax avoidance involves legally exploiting the tax system to reduce tax liabilities, such as through deductions and credits, as opposed to tax evasion, which is illegal.

Tax Loss

Tax loss refers to a situation where business expenses exceed its incomes, which can be used to offset other taxable income.

Economies of Scale

Cost advantages a business obtains due to expansion, characteristically causing a decrease in fixed costs per unit of production.