Question 1

If share price falls from $15 to $12 per share, and pays a dividend of $1 per share, what was the rate of return to shareholders?

Accepted Answer

A)  13.33% 
B)  -13.33% 
C)  16.67% 
D)  -16.67% 
A)  13.33% 
B)  -13.33% 
C)  16.67% 
D)  -16.67%

Question 2

Which of the following is generally NOT considered to be a viable operational goal for a firm?

Accepted Answer

A)  maintaining a strong local currency 
B)  maximization of after-tax income 
C)  minimization of the firm's effective global tax burden 
D)  correct positioning of the firm's income, cash flows and available funds as to country and currency 
A)  maintaining a strong local currency 
B)  maximization of after-tax income 
C)  minimization of the firm's effective global tax burden 
D)  correct positioning of the firm's income, cash flows and available funds as to country and currency

Question 3

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

Accepted Answer

A)  socialism. 
B)  impatient capital. 
C)  patient capital. 
D)  communism. 
A)  socialism. 
B)  impatient capital. 
C)  patient capital. 
D)  communism.

Question 4

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

Accepted Answer

A)  corporate governance 
B)  culture, history, and institutions 
C)  political risk 
D)  All of the above are important distinguishing concepts. 
A)  corporate governance 
B)  culture, history, and institutions 
C)  political risk 
D)  All of the above are important distinguishing concepts.

Question 5

Which of the following do NOT enhance control of publicly traded firms by select groups of shareholders?

Accepted Answer

A)  dual classes of stock with differential voting rights 
B)  simultaneous election of members of the board of directors 
C)  interlocking directorates 
D)  takeover safeguards 
A)  dual classes of stock with differential voting rights 
B)  simultaneous election of members of the board of directors 
C)  interlocking directorates 
D)  takeover safeguards

Question 6

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 7

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?

Accepted Answer

A)  banks 
B)  governments 
C)  other powerful stakeholders 
D)  all of the above 
A)  banks 
B)  governments 
C)  other powerful stakeholders 
D)  all of the above

Question 8

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 9

A business that is owned and managed by same entity is

Accepted Answer

A)  family business that sold majority ownership through IPO. 
B)  increasing the likelihood of agency problems. 
C)  decreasing the likelihood of agency problems. 
D)  has to offer ownership shares to professionally hired managers. 
A)  family business that sold majority ownership through IPO. 
B)  increasing the likelihood of agency problems. 
C)  decreasing the likelihood of agency problems. 
D)  has to offer ownership shares to professionally hired managers.

Question 10

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

Accepted Answer

A)  100% privately held, to 80% privately held, to 40% privately held, to 0% privately held. 
B)  0% privately held, to 40% privately held, to 80% privately held, to 100% privately held. 
C)  privately held firms stay private, and publicly traded firms stay public. 
D)  none of the above. 
A)  100% privately held, to 80% privately held, to 40% privately held, to 0% privately held. 
B)  0% privately held, to 40% privately held, to 80% privately held, to 100% privately held. 
C)  privately held firms stay private, and publicly traded firms stay public. 
D)  none of the above.

Question 11

Systematic risk can be defined as

Accepted Answer

A)  the total risk to the firm. 
B)  the risk of the individual security. 
C)  the added risk that a firm's shares bring to a diversified portfolio. 
D)  the risk that can be systematically diversified away. 
A)  the total risk to the firm. 
B)  the risk of the individual security. 
C)  the added risk that a firm's shares bring to a diversified portfolio. 
D)  the risk that can be systematically diversified away.

Question 12

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.

Accepted Answer

A) True 
 B)False

Question 13

According to Credit Suisse there are three catalysts that boost better performance of Stocks with Significant Family Influence (SSFI)

Accepted Answer

A)  long term management focus, better alignment between management and shareholder interests, stronger focus on the core business of the firm. 
B)  owners being managers at the same time, diversification of business units, focus on quarterly earnings performance. 
C)  shareholders focus, family interests incorporated in the corporate governance, stakeholders representation in the Board. 
D)  SSFI do not have better performance than corporations with 100% float. 
A)  long term management focus, better alignment between management and shareholder interests, stronger focus on the core business of the firm. 
B)  owners being managers at the same time, diversification of business units, focus on quarterly earnings performance. 
C)  shareholders focus, family interests incorporated in the corporate governance, stakeholders representation in the Board. 
D)  SSFI do not have better performance than corporations with 100% float.

Question 14

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

Accepted Answer

A)  maximization of interest expense 
B)  minimization of revenues from other countries 
C)  correct positioning of the firm's income, cash flow, and available funds as to country and currency 
D)  minimization of total assets held in foreign locations 
A)  maximization of interest expense 
B)  minimization of revenues from other countries 
C)  correct positioning of the firm's income, cash flow, and available funds as to country and currency 
D)  minimization of total assets held in foreign locations

Question 15

The relationship among stakeholders used to determine and control the strategic direction and performance of an organization is termed

Accepted Answer

A)  corporate governance. 
B)  Anglo-American activism. 
C)  capital structure. 
D)  working capital management. 
A)  corporate governance. 
B)  Anglo-American activism. 
C)  capital structure. 
D)  working capital management.

Question 16

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 17

According to an article in the French newspaper Le Figaro, French firms that are mostly privately held are out-performed by firms that are more widely held public firms. Note: In this context performance is measured by return to the owners.

Accepted Answer

A) True 
 B)False

If share price falls from $15 to $12 per share, and pays a dividend of $1 per share, what was the rate of return to shareholders?

Which of the following is generally NOT considered to be a viable operational goal for a firm?

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

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

Which of the following do NOT enhance control of publicly traded firms by select groups of shareholders?

The Shareholder Wealth Maximization Model

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

A business that is owned and managed by same entity is

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

Systematic risk can be defined as

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.

According to Credit Suisse there are three catalysts that boost better performance of Stocks with Significant Family Influence (SSFI)

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

The relationship among stakeholders used to determine and control the strategic direction and performance of an organization is termed

According to an article in the French newspaper Le Figaro, French firms that are mostly privately held are out-performed by firms that are more widely held public firms. Note: In this context performance is measured by return to the owners.

Multinational Financial Management: Opportunities and Challenges

The International Monetary System

The Balance of Payments

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination

Transaction Exposure

Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Raising Equity and Debt Globally

Multinational Tax Management

International Trade Finance

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Filters

Exam 4: Financial Goals and Corporate Governance

If share price falls from $15 to $12 per share, and pays a dividend of $1 per share, what was the rate of return to shareholders?

Which of the following is generally NOT considered to be a viable operational goal for a firm?

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

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

Which of the following do NOT enhance control of publicly traded firms by select groups of shareholders?

The Shareholder Wealth Maximization Model

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

A business that is owned and managed by same entity is

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

Systematic risk can be defined as

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.

According to Credit Suisse there are three catalysts that boost better performance of Stocks with Significant Family Influence (SSFI)

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

The relationship among stakeholders used to determine and control the strategic direction and performance of an organization is termed

According to an article in the French newspaper Le Figaro, French firms that are mostly privately held are out-performed by firms that are more widely held public firms. Note: In this context performance is measured by return to the owners.

Multinational Financial Management: Opportunities and Challenges

The International Monetary System

The Balance of Payments

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination

Transaction Exposure

Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Raising Equity and Debt Globally

Multinational Tax Management

International Trade Finance

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Filters