What are two possible reasons that management contracting is prevalent in the hotel industry?
What will be an ideal response?
Student answers will vary. A hotel, such as Hilton, that has an international reputation and is highly regarded would bring brand value as well as experience to a foreign firm. For the company supplying the contracting, the investment is minimized because the foreign company supplies the capital.
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Which of the following best describes a partially disclosed agency?
A) an agent with multiple principals who do not know each other's identities B) a transaction in which the third party does not know the identity of the agent C) a transaction in which the third party knows the agent, not the principal D) an agent who discloses only the name of his or her principal in a transaction
The term "preferred" comes from the fact that preferred shareholders receive all past (if cumulative) and present dividends before common shareholders can receive any cash dividends—in other words,
their dividend claims are preferred over common stock dividend claims. Indicate whether the statement is true or false.