Question 1

Which of the following statements about the board of directors is false?

Accepted Answer

A) Board members are elected by stockholders. 
B) The board can be held legally accountable for a company's actions. 
C) The board has the legal authority to hire,fire,and compensate the CEO. 
D) All directors are full-time employees of the company. 
E) Outside directors help perform the monitoring function of the board. 
A) Board members are elected by stockholders. 
B) The board can be held legally accountable for a company's actions. 
C) The board has the legal authority to hire,fire,and compensate the CEO. 
D) All directors are full-time employees of the company. 
E) Outside directors help perform the monitoring function of the board.

Question 2

The abbreviation IPO stands for

Accepted Answer

A) initial product output. 
B) interim production output. 
C) initial public offering. 
D) inventory purchasing online. 
E) none of these choices. 
A) initial product output. 
B) interim production output. 
C) initial public offering. 
D) inventory purchasing online. 
E) none of these choices.

Question 3

A stock option is a right to buy

Accepted Answer

A) shares of the company's stock at the stock's current price. 
B) shares of the company's stock at half the stock's current price. 
C) shares of the company's stock at a predetermined price at some point in the future. 
D) bonds issued by the company. 
E) none of these choices. 
A) shares of the company's stock at the stock's current price. 
B) shares of the company's stock at half the stock's current price. 
C) shares of the company's stock at a predetermined price at some point in the future. 
D) bonds issued by the company. 
E) none of these choices.

Question 4

In corporations,agency theory is used to explain the relationship between stockholders and corporate managers,and between upper-level managers and the lower-level managers they supervise.

Accepted Answer

A) True 
 B)False

Question 5

Business ethics are concerned with accepted principles of right or wrong governing the conduct of businesspeople.Identify and discuss the common examples of unethical decisions that businesspeople have made.

Accepted Answer

Unethical behavior often occurs when peo

Question 6

Confronted with agency problems,which of the following is not one of the challenges for principals?

Accepted Answer

A) Shape the behavior of agents so that they act in accordance with the goals set by principals 
B) Reduce the information asymmetry between agents and principals 
C) Develop mechanisms for removing agents who do not act in accordance with the goals of principals 
D) Develop mechanisms for removing agents who mislead principals 
E) All of these choices 
A) Shape the behavior of agents so that they act in accordance with the goals set by principals 
B) Reduce the information asymmetry between agents and principals 
C) Develop mechanisms for removing agents who do not act in accordance with the goals of principals 
D) Develop mechanisms for removing agents who mislead principals 
E) All of these choices

Question 7

Which of the following is not a criticism of boards?

Accepted Answer

A) Inside directors can use their control over information to influence outside directors. 
B) The CEO nominates most board directors. 
C) Outside board chairpersons are ineffective since the outside directors have no knowledge of company operations. 
D) Insiders can control the information the board receives. 
E) A board with more insiders may pursue strategies consistent with the interests of management rather than those of stockholders. 
A) Inside directors can use their control over information to influence outside directors. 
B) The CEO nominates most board directors. 
C) Outside board chairpersons are ineffective since the outside directors have no knowledge of company operations. 
D) Insiders can control the information the board receives. 
E) A board with more insiders may pursue strategies consistent with the interests of management rather than those of stockholders.

Question 8

While they do a good job of increasing employee satisfaction,positive incentive systems do little to maximize long-run profitability.

Accepted Answer

A) True 
 B)False

Question 9

A takeover constraint

Accepted Answer

A) limits the extent to which managers pursue strategies that are inconsistent with shareholder interest. 
B) prevents a company from being taken over. 
C) uses the threat of a takeover to cause the CEO to fear the loss of his or her job. 
D) is reduced by corporate raiders. 
E) is greatest when a company's stock price is significantly higher than book value. 
A) limits the extent to which managers pursue strategies that are inconsistent with shareholder interest. 
B) prevents a company from being taken over. 
C) uses the threat of a takeover to cause the CEO to fear the loss of his or her job. 
D) is reduced by corporate raiders. 
E) is greatest when a company's stock price is significantly higher than book value.

Question 10

While many agency relationships work well,problems arise when agents and principals have different goals.

Accepted Answer

A) True 
 B)False

Question 11

When managers pay bribes to gain access to lucrative business contracts,they are engaging in

Accepted Answer

A) opportunistic exploitation. 
B) utilitarian ethics. 
C) self-dealing. 
D) information manipulation. 
E) corruption. 
A) opportunistic exploitation. 
B) utilitarian ethics. 
C) self-dealing. 
D) information manipulation. 
E) corruption.

Question 12

Which of the following statements concerning profitability and profit growth is false?

Accepted Answer

A) Attaining future profit growth may require investments that reduce current profitability. 
B) Managers must find the right balance between profitability and profit growth. 
C) Too much emphasis on current profitability at the expense of profit growth can make an enterprise less attractive to shareholders. 
D) Boosting a company's profitability and profit growth rate is inconsistent with satisfying the claims of other key stakeholder groups. 
E) Too much emphasis on profit growth can reduce profitability and make an enterprise less attractive to shareholders. 
A) Attaining future profit growth may require investments that reduce current profitability. 
B) Managers must find the right balance between profitability and profit growth. 
C) Too much emphasis on current profitability at the expense of profit growth can make an enterprise less attractive to shareholders. 
D) Boosting a company's profitability and profit growth rate is inconsistent with satisfying the claims of other key stakeholder groups. 
E) Too much emphasis on profit growth can reduce profitability and make an enterprise less attractive to shareholders.

Question 13

Financial statements can be a tool of effective governance only if they provide consistent,detailed,and accurate information.

Accepted Answer

A) True 
 B)False

Question 14

Ethical decisions are those that are made in accordance with accepted principles of right and wrong.

Accepted Answer

A) True 
 B)False

Question 15

Governance mechanisms help align the incentives between principals and agents and help monitor and control agents.

Accepted Answer

A) True 
 B)False

Question 16

Agency theory offers a way of understanding why managers do not always act in the best interests of stakeholders.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not something that managers can do to make sure that ethical issues are considered in business decisions?

Accepted Answer

A) Hire and promote people who have a strong sense of personal ethics 
B) Build an organizational culture that places a high value on ethical behavior 
C) Adopt the Friedman doctrine 
D) Act with moral courage 
E) Put decision-making processes in place that require people to consider ethical dimensions of business decisions 
A) Hire and promote people who have a strong sense of personal ethics 
B) Build an organizational culture that places a high value on ethical behavior 
C) Adopt the Friedman doctrine 
D) Act with moral courage 
E) Put decision-making processes in place that require people to consider ethical dimensions of business decisions

Question 18

Critics of corporate governance state that boards with more inside directors than outside directors are generally an effective governance mechanism because they know more about how the company works.

Accepted Answer

A) True 
 B)False

Question 19

The relationship between an enterprise and its stakeholders is essentially what type of relationship?

Accepted Answer

A) Exchange 
B) Master-servant 
C) Bailor-bailee 
D) Supply and demand 
E) Quasi-egalitarian 
A) Exchange 
B) Master-servant 
C) Bailor-bailee 
D) Supply and demand 
E) Quasi-egalitarian

Question 20

Which of the following statements concerning stock-based compensation schemes for executives is incorrect?

Accepted Answer

A) They are the most objective and unambiguous way to compensate executives. 
B) They can align the interests of management and stockholders. 
C) They can dilute the equity of stockholders. 
D) The option strike price is typically the price that the stock was trading at when the option was granted. 
E) None of these choices are correct. 
A) They are the most objective and unambiguous way to compensate executives. 
B) They can align the interests of management and stockholders. 
C) They can dilute the equity of stockholders. 
D) The option strike price is typically the price that the stock was trading at when the option was granted. 
E) None of these choices are correct.

Which of the following statements about the board of directors is false?

The abbreviation IPO stands for

A stock option is a right to buy

In corporations,agency theory is used to explain the relationship between stockholders and corporate managers,and between upper-level managers and the lower-level managers they supervise.

Business ethics are concerned with accepted principles of right or wrong governing the conduct of businesspeople.Identify and discuss the common examples of unethical decisions that businesspeople have made.

Confronted with agency problems,which of the following is not one of the challenges for principals?

Which of the following is not a criticism of boards?

While they do a good job of increasing employee satisfaction,positive incentive systems do little to maximize long-run profitability.

A takeover constraint

While many agency relationships work well,problems arise when agents and principals have different goals.

When managers pay bribes to gain access to lucrative business contracts,they are engaging in

Which of the following statements concerning profitability and profit growth is false?

Financial statements can be a tool of effective governance only if they provide consistent,detailed,and accurate information.

Ethical decisions are those that are made in accordance with accepted principles of right and wrong.

Governance mechanisms help align the incentives between principals and agents and help monitor and control agents.

Agency theory offers a way of understanding why managers do not always act in the best interests of stakeholders.

Which of the following is not something that managers can do to make sure that ethical issues are considered in business decisions?

Critics of corporate governance state that boards with more inside directors than outside directors are generally an effective governance mechanism because they know more about how the company works.

The relationship between an enterprise and its stakeholders is essentially what type of relationship?

Which of the following statements concerning stock-based compensation schemes for executives is incorrect?

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Implementing Strategy in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

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Exam 11: Corporate Performance, Governance, and Business Ethics

Which of the following statements about the board of directors is false?

The abbreviation IPO stands for

A stock option is a right to buy

In corporations,agency theory is used to explain the relationship between stockholders and corporate managers,and between upper-level managers and the lower-level managers they supervise.

Business ethics are concerned with accepted principles of right or wrong governing the conduct of businesspeople.Identify and discuss the common examples of unethical decisions that businesspeople have made.

Confronted with agency problems,which of the following is not one of the challenges for principals?

Which of the following is not a criticism of boards?

While they do a good job of increasing employee satisfaction,positive incentive systems do little to maximize long-run profitability.

A takeover constraint

While many agency relationships work well,problems arise when agents and principals have different goals.

When managers pay bribes to gain access to lucrative business contracts,they are engaging in

Which of the following statements concerning profitability and profit growth is false?

Financial statements can be a tool of effective governance only if they provide consistent,detailed,and accurate information.

Ethical decisions are those that are made in accordance with accepted principles of right and wrong.

Governance mechanisms help align the incentives between principals and agents and help monitor and control agents.

Agency theory offers a way of understanding why managers do not always act in the best interests of stakeholders.

Which of the following is not something that managers can do to make sure that ethical issues are considered in business decisions?

Critics of corporate governance state that boards with more inside directors than outside directors are generally an effective governance mechanism because they know more about how the company works.

The relationship between an enterprise and its stakeholders is essentially what type of relationship?

Which of the following statements concerning stock-based compensation schemes for executives is incorrect?

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Implementing Strategy in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters