Question 1

Anglo-American is defined to mean

Accepted Answer

A) North, Central, and South America. 
B) the United States, Canada, and Western Europe. 
C) the United States, United Kingdom, Canada, Australia and New Zealand. 
D) the United States, France, Britain, and Germany. 
A) North, Central, and South America. 
B) the United States, Canada, and Western Europe. 
C) the United States, United Kingdom, Canada, Australia and New Zealand. 
D) the United States, France, Britain, and Germany. C

Question 2

Mary Chalmers ,who lives in Minnesota,purchased 100 shares of Delton Cables,a diversified machinery company headquartered in Germany.She purchased the stock in January of 2011 for €62.50 per share when the exchange rate was at $1.330/€.Today,the stock is trading for €68.00 per share and the exchange rate is $1.48/€.If Mary sells her shares today,what is the return on her investment due to price appreciation of the stock?

Accepted Answer

A) 11.28% 
B) 20.08% 
C) 8.80% 
D) 26.41% 
A) 11.28% 
B) 20.08% 
C) 8.80% 
D) 26.41% C

Question 3

Corporate wealth maximization,also known as the stakeholder capitalism model,holds that total risk (operational and financial)is more important than just systematic risk.

Accepted Answer

A) True 
 B)False  True

Question 4

Fissler AG,headquartered in Germany,records all of it sales worldwide in euros.Its USA division realized sales of €2,675,000 last year when the exchange rate was $1.33/€ and sales of €2,355,000 this year when the exchange rate was $1.48/€.What was the percent change in euro revenues for Fissler for the USA division over the last year?

Accepted Answer

A) -13.99% 
B) -11.96% 
C) -2.03% 
D) -20.89% 
A) -13.99% 
B) -11.96% 
C) -2.03% 
D) -20.89%

Question 5

Under the Shareholder Wealth Maximization Goal of Corporate Governance,poor firm performance is likely to be faced with all but which of the following?

Accepted Answer

A) sale of shares by disgruntled current shareholders 
B) shareholder activism to attempt a change in current management 
C) as a maximum threat, initiation of a corporate takeover 
D) prison time for executive management 
A) sale of shares by disgruntled current shareholders 
B) shareholder activism to attempt a change in current management 
C) as a maximum threat, initiation of a corporate takeover 
D) prison time for executive management

Question 6

Which of the following is a reason why managers act to maximize shareholder wealth in Anglo-American markets?

Accepted Answer

A) the use of stock options to align the goals of shareholders and managers 
B) the market for corporate control that allows for outside takeover of the firm 
C) performance based compensation for executive management 
D) all of the above 
A) the use of stock options to align the goals of shareholders and managers 
B) the market for corporate control that allows for outside takeover of the firm 
C) performance based compensation for executive management 
D) all of the above

Question 7

Describe the management objectives of a firm governed by the shareholder wealth maximization model and one governed by the stakeholder wealth maximization model.Give an example of how these two models may lead to different decision-making by executive management.

Accepted Answer

Shareholder wealth maximization attempts

Question 8

MultiProducts,Inc.has two classes of common stock.Class A has 1 million shares with 10 votes per share.Class B has 2 million shares with 1 vote per share.If the dividends per share are equal for both class A and B stock,then Class A shareholders have ________ of the votes and ________ of the dividends.

Accepted Answer

A) 33.33%; 33.33% 
B) 33.33%; 83.33% 
C) 83.33%; 83.33% 
D) 83.33%; 33.33% 
A) 33.33%; 33.33% 
B) 33.33%; 83.33% 
C) 83.33%; 83.33% 
D) 83.33%; 33.33%

Question 9

The Shareholder Wealth Maximization Model

Accepted Answer

A) combines the interests and inputs of shareholders, creditors, management, employees, and society. 
B) is being usurped by the Corporate Wealth Maximization Model as those types of MNEs dominate their global industry segments. 
C) clearly places shareholders as the primary stakeholder. 
D) is the dominant form of corporate management in the European-Japanese governance system. 
A) combines the interests and inputs of shareholders, creditors, management, employees, and society. 
B) is being usurped by the Corporate Wealth Maximization Model as those types of MNEs dominate their global industry segments. 
C) clearly places shareholders as the primary stakeholder. 
D) is the dominant form of corporate management in the European-Japanese governance system.

Question 10

Under the stakeholder capitalism model of corporate governance it is assumed that the long-term or "loyal" stockholders should influence corporate strategy more than the transient portfolio investor.

Accepted Answer

A) True 
 B)False

Question 11

According to a 2010 McKinsey survey,family businesses have a lower cost of debt financing than comparable publicly traded firms.

Accepted Answer

A) True 
 B)False

Question 12

Anglo-American equity markets are characterized by widespread ownership of shares. In other parts of the world ownership is often dominated by consortiums of controlling shareholders.Which of the following is NOT an example of a common consortium of controlling shareholders?

Accepted Answer

A) Japanese keiretsus 
B) South Korean chaebols 
C) U.S. labor unions 
D) All of the above are common controlling consortiums. 
A) Japanese keiretsus 
B) South Korean chaebols 
C) U.S. labor unions 
D) All of the above are common controlling consortiums.

Question 13

The Sarbanes-Oxley Act (SOX)was passed in 2002 by the U.S.Congress to address corporate governance reform.SOX has not been without controversy to put it mildly. Identify and discuss several positive and negative impacts of SOX on corporations here and abroad.

Accepted Answer

The Signature clause requires CEOs and C

Question 14

Which of the following is a common operational financial objective for MNEs?

Accepted Answer

A) maximization of interest expense 
B) minimization of the firm's effective global tax burden 
C) minimization of revenues from other countries 
D) minimization of total assets held in foreign locations 
A) maximization of interest expense 
B) minimization of the firm's effective global tax burden 
C) minimization of revenues from other countries 
D) minimization of total assets held in foreign locations

Question 15

In finance,an efficient market is one in which

Accepted Answer

A) prices are assumed to be correct. 
B) prices adjust quickly and accurately to new information. 
C) prices are the best allocators of capital in the macro economy. 
D) all of the above 
A) prices are assumed to be correct. 
B) prices adjust quickly and accurately to new information. 
C) prices are the best allocators of capital in the macro economy. 
D) all of the above

Question 16

Unsystematic risk can be defined as

Accepted Answer

A) the total risk to the firm. 
B) the risk of a well-diversified portfolio. 
C) the added risk that a firm's shares bring to a diversified portfolio. 
D) beta. 
A) the total risk to the firm. 
B) the risk of a well-diversified portfolio. 
C) the added risk that a firm's shares bring to a diversified portfolio. 
D) beta.

Question 17

Warren Buffett and his investment firm Berkshire Hathaway is an outstanding example of impatient capital investing.

Accepted Answer

A) True 
 B)False

Question 18

According to a 2010 McKinsey survey,________ of all companies in the S&P 500 index may be defined as family businesses,meaning that a family owns a significant share and can influence important decisions,particularly the election of the CEO and chairman.

Accepted Answer

A) 33% 
B) 25% 
C) 15% 
D) 10% 
A) 33% 
B) 25% 
C) 15% 
D) 10%

Question 19

Which of the following is the "signature" clause of the Sarbanes -Oxley Act?

Accepted Answer

A) CEOs and CFOs of publicly-traded firms must vouch for the veracity of the firm's financial statements. 
B) Corporate board audit and compensation committee members must come from outside directors. 
C) Companies may not make loans to their officers and directors. 
D) Companies must test their internal financial controls against fraud. 
A) CEOs and CFOs of publicly-traded firms must vouch for the veracity of the firm's financial statements. 
B) Corporate board audit and compensation committee members must come from outside directors. 
C) Companies may not make loans to their officers and directors. 
D) Companies must test their internal financial controls against fraud.

Question 20

Fissler AG,headquartered in Germany,records all of it sales worldwide in euros.Its USA division realized sales of €2,675,000 last year when the exchange rate was $1.33/€ and sales of €2,355,000 this year when the exchange rate was $1.48/€.What was the percent change in USD revenues for the USA division over the last year?

Accepted Answer

A) -13.99% 
B) -11.96% 
C) -2.03% 
D) -20.89% 
A) -13.99% 
B) -11.96% 
C) -2.03% 
D) -20.89%

Anglo-American is defined to mean

Corporate wealth maximization,also known as the stakeholder capitalism model,holds that total risk (operational and financial)is more important than just systematic risk.

Under the Shareholder Wealth Maximization Goal of Corporate Governance,poor firm performance is likely to be faced with all but which of the following?

Which of the following is a reason why managers act to maximize shareholder wealth in Anglo-American markets?

Describe the management objectives of a firm governed by the shareholder wealth maximization model and one governed by the stakeholder wealth maximization model.Give an example of how these two models may lead to different decision-making by executive management.

MultiProducts,Inc.has two classes of common stock.Class A has 1 million shares with 10 votes per share.Class B has 2 million shares with 1 vote per share.If the dividends per share are equal for both class A and B stock,then Class A shareholders have of the votes and of the dividends.

The Shareholder Wealth Maximization Model

Under the stakeholder capitalism model of corporate governance it is assumed that the long-term or "loyal" stockholders should influence corporate strategy more than the transient portfolio investor.

According to a 2010 McKinsey survey,family businesses have a lower cost of debt financing than comparable publicly traded firms.

Anglo-American equity markets are characterized by widespread ownership of shares. In other parts of the world ownership is often dominated by consortiums of controlling shareholders.Which of the following is NOT an example of a common consortium of controlling shareholders?

The Sarbanes-Oxley Act (SOX)was passed in 2002 by the U.S.Congress to address corporate governance reform.SOX has not been without controversy to put it mildly. Identify and discuss several positive and negative impacts of SOX on corporations here and abroad.

Which of the following is a common operational financial objective for MNEs?

In finance,an efficient market is one in which

Unsystematic risk can be defined as

Warren Buffett and his investment firm Berkshire Hathaway is an outstanding example of impatient capital investing.

According to a 2010 McKinsey survey,________ of all companies in the S&P 500 index may be defined as family businesses,meaning that a family owns a significant share and can influence important decisions,particularly the election of the CEO and chairman.

Which of the following is the "signature" clause of the Sarbanes -Oxley Act?

Current Multinational Challenges and the Global Economy

The International Monetary System

The Balance of Payments

Current Multinational Financial Challenges: the Credit Crisis of 2007 - 2009

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction and Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Sourcing Equity and Debt Globally

Multinational Tax Management

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

International Portfolio Theory and Diversification

Working Capital Management

International Trade Finance

Filters

Exam 2: Financial Goals and Corporate Governance

Anglo-American is defined to mean

Corporate wealth maximization,also known as the stakeholder capitalism model,holds that total risk (operational and financial)is more important than just systematic risk.

Under the Shareholder Wealth Maximization Goal of Corporate Governance,poor firm performance is likely to be faced with all but which of the following?

Which of the following is a reason why managers act to maximize shareholder wealth in Anglo-American markets?

Describe the management objectives of a firm governed by the shareholder wealth maximization model and one governed by the stakeholder wealth maximization model.Give an example of how these two models may lead to different decision-making by executive management.

The Shareholder Wealth Maximization Model

Under the stakeholder capitalism model of corporate governance it is assumed that the long-term or "loyal" stockholders should influence corporate strategy more than the transient portfolio investor.

According to a 2010 McKinsey survey,family businesses have a lower cost of debt financing than comparable publicly traded firms.

Anglo-American equity markets are characterized by widespread ownership of shares. In other parts of the world ownership is often dominated by consortiums of controlling shareholders.Which of the following is NOT an example of a common consortium of controlling shareholders?

The Sarbanes-Oxley Act (SOX)was passed in 2002 by the U.S.Congress to address corporate governance reform.SOX has not been without controversy to put it mildly. Identify and discuss several positive and negative impacts of SOX on corporations here and abroad.

Which of the following is a common operational financial objective for MNEs?

In finance,an efficient market is one in which

Unsystematic risk can be defined as

Warren Buffett and his investment firm Berkshire Hathaway is an outstanding example of impatient capital investing.

According to a 2010 McKinsey survey,________ of all companies in the S&P 500 index may be defined as family businesses,meaning that a family owns a significant share and can influence important decisions,particularly the election of the CEO and chairman.

Which of the following is the "signature" clause of the Sarbanes -Oxley Act?

Current Multinational Challenges and the Global Economy

The International Monetary System

The Balance of Payments

Current Multinational Financial Challenges: the Credit Crisis of 2007 - 2009

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction and Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Sourcing Equity and Debt Globally

Multinational Tax Management

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

International Portfolio Theory and Diversification

Working Capital Management

International Trade Finance

Filters