Exam 2: Financial Goals and Corporate Governance

The authors reference empirical evidence that family-controlled firms all over the world may outperform publicly traded firms.What factors are cited as reasons for this occurring?

The shareholder wealth maximization model assumes as a universal truth that the market is efficient.

Systematic risk can be defined as

According to a 2010 McKinsey survey,family businesses tend to use more debt than a benchmark group of comparable publicly traded peer companies.

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

Privatization is a term used to describe

Empirical studies of firms in Norway and Sweden show that as shareholder equity rights increased,the margin between ROA and cost of capital also increased.

The Board of Directors

Accountants and lawyers have found the costs to corporations to meet Sarbanes-Oxley regulatory requirements to be disappointingly small and less than anticipated when the legislation was enacted in 2002.

The authors suggest that the most likely progression of ownership goes from

The deliberation of the process demonstrated in the European-Japanese system of corporate governance has sometimes been termed ________.

Systematic risk can be eliminated through portfolio diversification.

The Stakeholder Capitalism Model

The stakeholder capitalism model is characterized by the desire of controlling shareholders to maximize long-term return to equity just as in the shareholder wealth maximization model of corporate governance. However,stakeholder capitalism controlling shareholders are more constrained by which of the following groups than in the shareholder wealth maximization model?

It may be (is probably the case)that family owned businesses the world over out-perform their publicly traded brethren. Which of these factors is attributed to family owned firm dominance over public firms?

Empirical studies of firms in Norway and Sweden show that firms with Anglo-American board members

With shareholder wealth maximization as the manager's goal,capital may be termed ________.

According to a 2010 McKinsey survey,family-influenced businesses tend to underperform the public sector in each of five major markets worldwide.

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 total return on her investment?

Which of the following is NOT an important concept when distinguishing between international and domestic financial management?