An ability to efficiently allocate capital through an internal market may help the firm protect the competitive advantages it develops:
A) through reduced disclosure to outside parties.
B) by the ability to not report losses to investors.
C) by the ability to increase pay to managers without shareholders being aware.
D) through the ability to reinvest cash in dividends to shareholders.

Question

Quizplus · Accepted Answer

Efficient capital allocation through an internal market allows a firm to reduce the need for external financing, thereby minimizing the disclosure of sensitive information to outside parties, which can help protect its competitive advantages.

An Ability to Efficiently Allocate Capital Through an Internal Market