Exam 33: Governance and Corporate Control Around the World

A Korean conglomerate is called a(n)

Conglomerates in Korea are called chaebols.

For a given country, which conditions will favor the formation of conglomerates? I.limited financial markets; II.poor investor protection; III.difficulty accessing international capital markets; IV.limited and transparent government

In Japan, intercompany financing most typically arises in the form of

Japan has a bank-based financial system.

A firm whose only asset is controlling blocks of shares in other companies is called

German governance seeks to include labor unions as a partner in making long-term decisions.

In Japan, a keiretsu is a network of companies usually organized around a major bank.

In Japan, commercial banks can own a company's stock up to

Under which circumstances would a conglomerate be effective?

Countries that have poor protection of shareholders' and creditors' rights generally have I.smaller stock markets; II.fewer listed firms and fewer IPOs; III.less debt financing for private firms

Direct individual investment in equity markets generally plays a smaller role in less-developed countries.

In Japan, the racketeers who demand payment in exchange for not disrupting shareholders' meetings are known as

What are some of the advantages of market-based systems? I.successful in developing new industries; II.more effective in shrinking capital in declining industries; III.more reliant on transparent financial reporting; IV.more diverse as sources of corporate financing

Briefly explain the term pyramid in the context of corporate control.

In which of the following countries do individual investors play the largest role in corporate governance?

In which area do households allocate the highest percentage of their portfolio to direct equity ownership?

Which of the following are mechanisms that help minimize agency problems? I.monitoring by boards of directors; II.compensation tied to earnings and stock price; III.transparent financial reporting; IV.the threat of takeover

Large business combinations in Japan are carried out through cross-holding ownership of common stock. These are called

Dual-class equity occurs frequently in