In the start-up stage of the industry life cycle,
A) it is difficult to predict which firms will succeed and which firms will fail.
B) industry growth is very rapid.
C) firms pay a high level of dividends.
D) it is difficult to predict which firms will succeed and which firms will fail, and industry growth is very rapid.
E) industry growth is very rapid, and firms pay a high level of dividends.

Question

Quizplus · Accepted Answer

In the start-up stage of the industry life cycle, it is indeed difficult to predict which firms will succeed and which firms will fail due to the high level of uncertainty and innovation. Additionally, industry growth is typically very rapid as new products and services are introduced and demand begins to accelerate. Firms in this stage are less likely to pay high dividends, as they often reinvest any earnings back into the company to fuel growth.

In the Start-Up Stage of the Industry Life Cycle