In a licensing arrangement, firms choose foreign organizations to manufacture their products in another country in return for a fee plus royalties
Indicate whether the statement is true or false.
Answer: TRUE
Explanation: A licensing arrangement is a contract under which one firm allows another to use its brand name, operating procedures, or proprietary technology. Firms give foreign individuals or companies exclusive rights (called licensing agreements) to manufacture or market their products in that market. In return, the exporter receives a fee plus ongoing payments (royalties) that are calculated as a percentage of the license holder's sales.
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Under the Static Tradeoff Theory, the optimal debt-to-equity ratio is higher than under Modigliani and Miller (with taxes)
Indicate whether the statement is true or false
Aggressive stock management focuses on the pursuit of
A) dividend income. B) short-term capital gains. C) long-term capital gains. D) all of the above.