In a theoretical paper, Williams (1995) develops a model of industry equilibrium that incorporates agency costs due to both creditor-shareholder and management-shareholder conflicts
His model has implications for the distribution of firms within an industry in equilibrium. Which of the following statements correctly describes Williams' depiction of industry equilibrium?
a. Each industry has a core of large, profitable, secure, capital-intensive firms, each with at least some external debt, and a competitive fringe of small, marginally profitable or unprofitable, risky, labor-intensive firms.
b. All firms in an industry will ultimately be large, labor-intensive firms with large proportions of debt in their capital structures.
c. All firms in an industry will ultimately be small, capital-intensive firms with no debt.
d. All firms in an industry will ultimately be large, capital-intensive firms with large proportions of debt in their capital structures.
A
You might also like to view...
How do you feel about having a female boss? Why?
What will be an ideal response?
Attribute sampling is used to estimate the proportion of a population that possesses a specified characteristic.
Answer the following statement true (T) or false (F)
Describe how the transformational leadership factors in the Full Range Model of Transformational Leadership are similar to Kouzes and Posner’s five practices of exemplary leadership.
What will be an ideal response?
Which of the following is not one of the Big Five personality factors?
A. locus of control B. emotional stability C. agreeableness D. extraversion