Question 1

Principal-agent conflicts result in agency costs.

Accepted Answer

A) True 
 B)False

Question 2

_____ refers to the stock in a firm (usually expressed in shares),which represents the owners' rights.

Accepted Answer

A)  Equity 
B)  Debt 
C)  Bond 
D)  Reserve 
A)  Equity 
B)  Debt 
C)  Bond 
D)  Reserve

Question 3

Outline the principal-agent problems in an agency relationship.

Accepted Answer

The relationship between shareholders an

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Tunneling is a legal method of solving principal-principal conflicts.

Accepted Answer

A) True 
 B)False

Question 6

Firms with ____ ownership have a separation of ownership and control.

Accepted Answer

A)  state 
B)  concentrated 
C)  diffused 
D)  focused 
A)  state 
B)  concentrated 
C)  diffused 
D)  focused

Question 7

For equity,the cost of capital is the interest.

Accepted Answer

A) True 
 B)False

Question 8

Other than families,the state is another major owner of firms around the world.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)  concentrated 
B)  family 
C)  diffused 
D)  state 
A)  concentrated 
B)  family 
C)  diffused 
D)  state

Question 10

The board of directors' effectiveness in serving the control function stems from their independence,deterrence,and norms.

Accepted Answer

A) True 
 B)False

Question 11

Private equity is primarily invested through _____.

Accepted Answer

A)  leveraged buyouts 
B)  acquisitions 
C)  alliances 
D)  stock swaps 
A)  leveraged buyouts 
B)  acquisitions 
C)  alliances 
D)  stock swaps

Question 12

In _____ ownership and control,founders start up firms and completely own and control them on an individual or family basis.

Accepted Answer

A)  concentrated 
B)  diffused 
C)  capitalized 
D)  declared 
A)  concentrated 
B)  diffused 
C)  capitalized 
D)  declared

Question 13

Which of the following statement concerning principal-agent versus principal-principal conflicts is true?

Accepted Answer

A)  Formal institutional protection is often lacking in principal-agent conflicts. 
B)  Courts are more protective of minority shareholder rights in principal-principal conflicts. 
C)  Manifestations in principal-agent conflicts take the form of expropriation. 
D)  Considering ownership pattern in principal-principal conflicts, often greater than 50 percent of equity is controlled by the largest shareholders. 
A)  Formal institutional protection is often lacking in principal-agent conflicts. 
B)  Courts are more protective of minority shareholder rights in principal-principal conflicts. 
C)  Manifestations in principal-agent conflicts take the form of expropriation. 
D)  Considering ownership pattern in principal-principal conflicts, often greater than 50 percent of equity is controlled by the largest shareholders.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Since the 1980s,American managers have become much more focused on stock prices,resulting in "shareholder capitalism."

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Listing shares on foreign stock exchanges is known as _____.

Accepted Answer

A)  capital rationing 
B)  diagonal spread 
C)  cross-listing 
D)  primary listing 
A)  capital rationing 
B)  diagonal spread 
C)  cross-listing 
D)  primary listing

Question 18

Discuss the opportunistic agents versus managerial stewards' debate concerning corporate finance and governance.

Accepted Answer

The agency theory assumes managers to be

Question 19

LBO-based private equity transactions are associated with three major changes in corporate governance.List these changes.

Accepted Answer

In an LBO,private investors,often in par

Question 20

Activities that enrich controlling shareholders at the expense of minority shareholders are referred to as _____.

Accepted Answer

A)  amortization 
B)  accretion 
C)  backwardation 
D)  expropriation 
A)  amortization 
B)  accretion 
C)  backwardation 
D)  expropriation

Principal-agent conflicts result in agency costs.

_____ refers to the stock in a firm (usually expressed in shares),which represents the owners' rights.

Outline the principal-agent problems in an agency relationship.

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

Tunneling is a legal method of solving principal-principal conflicts.

Firms with ____ ownership have a separation of ownership and control.

For equity,the cost of capital is the interest.

Other than families,the state is another major owner of firms around the world.

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

The board of directors' effectiveness in serving the control function stems from their independence,deterrence,and norms.

Private equity is primarily invested through _____.

In _____ ownership and control,founders start up firms and completely own and control them on an individual or family basis.

Which of the following statement concerning principal-agent versus principal-principal conflicts is true?

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

Since the 1980s,American managers have become much more focused on stock prices,resulting in "shareholder capitalism."

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

Listing shares on foreign stock exchanges is known as _____.

Discuss the opportunistic agents versus managerial stewards' debate concerning corporate finance and governance.

LBO-based private equity transactions are associated with three major changes in corporate governance.List these changes.

Activities that enrich controlling shareholders at the expense of minority shareholders are referred to as _____.

Globalizing Business

Understanding Formal Institutions: Politics, Laws, and Economics

Emphasizing Informal Institutions: Cultures, Ethics, and Norms

Leveraging Resources and Capabilities

Trading Internationally

Investing Abroad Directly

Dealing with Foreign Exchange

Capitalizing on Global and Regional Integration

Growing and Internationalizing the Entrepreneurial Firm

Entering Foreign Markets

Managing Global Competitive Dynamics

Making Alliances and Acquisitions Work

Strategizing,Structuring,and Learning around the World

Competing on Marketing and Supply Chain Management

Managing Human Resources Globally

Managing Corporate Social Responsibility Globally

Filters

Exam 16: Financing and Governing the Corporation Globally

Principal-agent conflicts result in agency costs.

_____ refers to the stock in a firm (usually expressed in shares),which represents the owners' rights.

Outline the principal-agent problems in an agency relationship.

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

Tunneling is a legal method of solving principal-principal conflicts.

Firms with ____ ownership have a separation of ownership and control.

For equity,the cost of capital is the interest.

Other than families,the state is another major owner of firms around the world.

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

The board of directors' effectiveness in serving the control function stems from their independence,deterrence,and norms.

Private equity is primarily invested through _____.

In _____ ownership and control,founders start up firms and completely own and control them on an individual or family basis.

Which of the following statement concerning principal-agent versus principal-principal conflicts is true?

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

Since the 1980s,American managers have become much more focused on stock prices,resulting in "shareholder capitalism."

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

Listing shares on foreign stock exchanges is known as _____.

Discuss the opportunistic agents versus managerial stewards' debate concerning corporate finance and governance.

LBO-based private equity transactions are associated with three major changes in corporate governance.List these changes.

Activities that enrich controlling shareholders at the expense of minority shareholders are referred to as _____.

Globalizing Business

Understanding Formal Institutions: Politics, Laws, and Economics

Emphasizing Informal Institutions: Cultures, Ethics, and Norms

Leveraging Resources and Capabilities

Trading Internationally

Investing Abroad Directly

Dealing with Foreign Exchange

Capitalizing on Global and Regional Integration

Growing and Internationalizing the Entrepreneurial Firm

Entering Foreign Markets

Managing Global Competitive Dynamics

Making Alliances and Acquisitions Work

Strategizing,Structuring,and Learning around the World

Competing on Marketing and Supply Chain Management

Managing Human Resources Globally

Managing Corporate Social Responsibility Globally

Filters