Entrepreneurship Theories: Financial Theories

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Financial Theories Exam

Profit, Signaling, and Capital Constraints

1. According to classic Profit Maximization Theory, what is the primary goal of the firm?

2. Why do "Corporate Spin-offs" often occur according to information theories?

3. What is the "Entrepreneur's Dilemma" in Information Asymmetry Theory?

4. How does Real Options Theory view a startup's initial investment?

5. What does Liquidity Constraint Theory suggest is the primary barrier to entrepreneurship?

6. According to Signaling Theory, what makes a signal (like investing your own money) effective?

7. According to Pecking Order Theory, which funding source do entrepreneurs prefer *first*?

8. Agency Theory primarily addresses the potential conflict of interest between...?

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