Question 1

Corporate governance reform requires all except:

Accepted Answer

A) increasing the decision making power of managers 
B) strengthening the independence of boards of directors with more outsiders 
C) enhancing the transparency and disclosure standard of financial statements 
D) energizing the regulatory and monitoring functions of securities commissions 
A) increasing the decision making power of managers 
B) strengthening the independence of boards of directors with more outsiders 
C) enhancing the transparency and disclosure standard of financial statements 
D) energizing the regulatory and monitoring functions of securities commissions A

Question 2

Suppose Mr.Lee and his relatives hold 30% of shares outstanding of Samsung Life,which in turn holds 20% of Samsung Electronics.What is the cash flow right of the Lee family in Samsung Electronics?

Accepted Answer

A) 50%. 
B) 10% 
C) 20% 
D) 6% 
A) 50%. 
B) 10% 
C) 20% 
D) 6% D

Question 3

English common law countries tend to provide a stronger protection of shareholder rights than French civil law countries because

Accepted Answer

A) the former countries tend to be more democratic than the latter. 
B) the former countries tend to protect property rights better than the latter. 
C) the former countries tend to have more separation of power than the latter. 
D) All of these. 
A) the former countries tend to be more democratic than the latter. 
B) the former countries tend to protect property rights better than the latter. 
C) the former countries tend to have more separation of power than the latter. 
D) All of these. B

Question 4

Debt may be beneficial for the following reasons except:

Accepted Answer

A) because it reduces free cash flows 
B) because of its disciplinary effect on managers 
C) because the interest payments benefit shareholders 
D) because interest has to be paid to avoid bankruptcy 
A) because it reduces free cash flows 
B) because of its disciplinary effect on managers 
C) because the interest payments benefit shareholders 
D) because interest has to be paid to avoid bankruptcy

Question 5

Corporate governance can be defined as

Accepted Answer

A) the government-imposed rules and regulations affecting corporate management. 
B) the general framework in which company management is selected and monitored. 
C) the rules and regulations adopted by boards of directors specifying how to manage companies. 
D) the economic, legal, and institutional framework in which corporate control and cash flow. 
A) the government-imposed rules and regulations affecting corporate management. 
B) the general framework in which company management is selected and monitored. 
C) the rules and regulations adopted by boards of directors specifying how to manage companies. 
D) the economic, legal, and institutional framework in which corporate control and cash flow.

Question 6

Discuss the major advantage and key weakness of a public corporation.

Accepted Answer

The main advantage of public corporation

Question 7

The board of directors may grant stock options to managers in order to

Accepted Answer

A) save executive compensation costs. 
B) use as a substitute for bonus. 
C) align the interest of managers with that of shareholders. 
D) none of these. 
A) save executive compensation costs. 
B) use as a substitute for bonus. 
C) align the interest of managers with that of shareholders. 
D) none of these.

Question 8

Weak investor protection is associated with all of the following except:

Accepted Answer

A) valuable stock markets 
B) sharp market declines during a financial crisis 
C) lower stock market capitalization 
D) fewer publicly traded companies 
A) valuable stock markets 
B) sharp market declines during a financial crisis 
C) lower stock market capitalization 
D) fewer publicly traded companies

Question 9

Private benefits of corporate control will tend to be higher in

Accepted Answer

A) in French civil law countries than in English common law countries. 
B) in English common law countries than in French civil law countries. 
C) in French civil law countries than in Scandinavian civil law countries. 
D) In English common law countries than in German civil law countries. 
A) in French civil law countries than in English common law countries. 
B) in English common law countries than in French civil law countries. 
C) in French civil law countries than in Scandinavian civil law countries. 
D) In English common law countries than in German civil law countries.

Question 10

Dominant investors may acquire control through all of the following except:

Accepted Answer

A) interfirm cross-holdings 
B) intrafirm cross-holdings 
C) shares with superior voting rights 
D) pyramidal ownership structure 
A) interfirm cross-holdings 
B) intrafirm cross-holdings 
C) shares with superior voting rights 
D) pyramidal ownership structure

Question 11

Concentrated corporate ownership is most prevalent in

Accepted Answer

A) Japan. 
B) the United Kingdom. 
C) the United States. 
D) Australia. 
A) Japan. 
B) the United Kingdom. 
C) the United States. 
D) Australia.

Question 12

Explain the agency problem and how it can be remedied.

Accepted Answer

The agency problem arises out of the fac

Question 13

find that

Accepted Answer

A) the entrenchment effect dominates the alignment effect 
B) the alignment effect dominates the entrenchment effect 
C) the entrenchment effect dominates the alignment effect over the range of managerial ownership between 5 percent and 25 percent 
D) the alignment effect dominates the entrenchment effect over the range of managerial ownership between 5 percent and 25 percent 
A) the entrenchment effect dominates the alignment effect 
B) the alignment effect dominates the entrenchment effect 
C) the entrenchment effect dominates the alignment effect over the range of managerial ownership between 5 percent and 25 percent 
D) the alignment effect dominates the entrenchment effect over the range of managerial ownership between 5 percent and 25 percent

Question 14

Agency problems may be alleviated by:

Accepted Answer

A) incentive contracts 
B) debt 
C) market for corporate control 
D) all of these 
A) incentive contracts 
B) debt 
C) market for corporate control 
D) all of these

Question 15

Sarbanes-Oxley Act of 2002 stipulates that

Accepted Answer

A) a public accounting oversight board be created. 
B) the company should appoint independent financial experts to its audit committee. 
C) CEO and CFO sign off the company's financial statements. 
D) all of these. 
A) a public accounting oversight board be created. 
B) the company should appoint independent financial experts to its audit committee. 
C) CEO and CFO sign off the company's financial statements. 
D) all of these.

Question 16

Discuss the concept of "private benefits of corporate control".

Accepted Answer

Private benefits of corporate control ma

Question 17

The central issue of corporate governance is

Accepted Answer

A) how to protect creditors from managers and controlling shareholders. 
B) how to protect outside investors from the controlling insiders. 
C) how to alleviate the conflicts of interest between managers and shareholders. 
D) how to alleviate the conflicts of interest between shareholders and bondholders. 
A) how to protect creditors from managers and controlling shareholders. 
B) how to protect outside investors from the controlling insiders. 
C) how to alleviate the conflicts of interest between managers and shareholders. 
D) how to alleviate the conflicts of interest between shareholders and bondholders.

Question 18

How are investors protected under English common law?
 What are the implications?

Accepted Answer

The English common law protects sharehol

Question 19

How can listing overseas benefit the corporate governance of a public company?

Accepted Answer

Companies domiciled in countries with we

Question 20

Free cash flows refer to

Accepted Answer

A) a firm's cash reserve in excess of tax obligation. 
B) a firm's funds in excess of what's needed for undertaking all profitable projects. 
C) a firm's cash reserve in excess of interest and tax payments. 
D) a firm's income tax refund that is due to interest payments on borrowing. 
A) a firm's cash reserve in excess of tax obligation. 
B) a firm's funds in excess of what's needed for undertaking all profitable projects. 
C) a firm's cash reserve in excess of interest and tax payments. 
D) a firm's income tax refund that is due to interest payments on borrowing.

Exam 21: International Tax Environment and Transfer Pricing

Corporate governance reform requires all except:

Suppose Mr.Lee and his relatives hold 30% of shares outstanding of Samsung Life,which in turn holds 20% of Samsung Electronics.What is the cash flow right of the Lee family in Samsung Electronics?

English common law countries tend to provide a stronger protection of shareholder rights than French civil law countries because

Debt may be beneficial for the following reasons except:

Corporate governance can be defined as

Discuss the major advantage and key weakness of a public corporation.

The board of directors may grant stock options to managers in order to

Weak investor protection is associated with all of the following except:

Private benefits of corporate control will tend to be higher in

Dominant investors may acquire control through all of the following except:

Concentrated corporate ownership is most prevalent in

Explain the agency problem and how it can be remedied.

find that

Agency problems may be alleviated by:

Sarbanes-Oxley Act of 2002 stipulates that

Discuss the concept of "private benefits of corporate control".

The central issue of corporate governance is

How are investors protected under English common law? What are the implications?

How can listing overseas benefit the corporate governance of a public company?

Free cash flows refer to

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Trade Finance

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