Which of the Following Is not a Strong Method of Identifying

question 17

Multiple Choice

Which of the following is not a strong method of identifying business opportunities?

• A) Searching through a process of identification and selection beginning with self- developed (or group-developed) ideas.
• B) A person has a talent for making something and decides that he or she should go into business.
• C) Searching through a process of identification and selection starting with research on "hot" businesses or growth areas.
• D) A person has an idea for a product or service and searches for a market.

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Definitions:

Debt/Equity Ratio

A gauge for comparing the mix of a company's funding through shareholders' equity versus debt, frequently applied to understand the company's use of financial leverage.

Retained Earnings

Retained earnings represent the portion of net income left after dividends have been paid to shareholders, which is then reinvested in the business.

Static Theory

A concept in economic theory that assumes conditions remain constant over time.

Capital Structure

The mix of debt and equity financing that a company uses to fund its operations and growth.