Which of the following is true of a follow the leader scenario in the context of foreign direct investment?
A) Companies that practice follow the leader supply each other with inputs.
B) Companies that practice follow the leader pressurize each other to follow environmentally safe methods.
C) It is a frequent practice in industries with a limited number of large firms.
D) It is common in industries in which producers source component parts from suppliers.
Question 2
When using equity financing, firms run the risk of ________.
A) diluting the firm's ownership
B) regular monthly payments of principal and interest
C) incurring a high debt ratio
D) severe penalties for late or missed payments of interest
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Which of the following statements is true of linkage?
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