Chapter 13 Flashcards
What is joint venture
Joint venture is between two parties. And the resultant company should have more strength than sum of 2 companies strength. It is synergy.
What is minority equity
Lets assume you are going to another country as an investor and wants to do joint venture with some company. If you have share less than 50%, you will be minority equity
What are the options for a person who is going to another country as an investor
- Minority equity
- Acquisition
- Merger
- 100% ownership
What is debt equity ratio
Sometime banks demand a certain equity before going loan as a share. It is called debt equity ratio.
What is majority share holder
If there are two parties in a project. The party who have more shares will be majority share holder.
What is majority equity
51% shares
What is merger
Merge of two company having same business and going through competition.
What is the main purpose of merger
Monopoly
What are types of merger in international entrepreneurship
- Horizontal mergers (merger to 2 rival companies)
- Vertical mergers (buy back franchise by main company)
- Product extension merger (merger because of growth of product)
- Market extension merger
- Diversified merger
What is acquisition
Acquiring shares of a company is called acquisition
What is GATT
General agreement of tariff and trades. It was an agreement between 100 countries in 1947 for open trading step by step.
What is WTO
World trade organization is also for open trade in globe
What is protectionism in trade
Some countries do not want to share business and oppose to WTO
What is NAFTA
North American free trade agreement is for free trade between Mexico, Canada and America
