Exam 16: Financing and Governing the Corporation Globally

For equity,the cost of capital is the interest.

Ranging from entrepreneurial start-ups to multinational enterprises (MNEs),all firms need to raise capital.

The basic laws in supply and demand suggest that in general,the larger the pool of capital providers 

In state-owned enterprises,citizens have the rights to enjoy dividends generated from SOEs.

Corporate governance in ____ enterprises has relatively weak external and weak internal governance mechanisms.

In the principal-agent relationship,agents are owners who delegate authority.

Managers need to develop firm-specific capabilities to differentiate a firm on governance dimensions and corporate finance.

The board of directors oversees and ratifies strategic decisions and evaluates,rewards,and,if necessary,penalizes top managers.

Family ownership and control may lead to the selection of less-qualified managers.

Equity capital invested in non-public companies is called _____.

_____ are often labeled independent directors.

The owners of a firm are often known as _____.

The amount of dividend a firm pays its shareholders is always fixed.

Private equity is primarily invested through _____.

Firms with ____ ownership have numerous small shareholders but none with a dominant level of control.

Inside directors are more independent and can better safeguard shareholder interests.

Elaborate on the principal-principal conflicts.

Information asymmetries exist between principals and agents.