Question 1

When two firms combine to form a new firm,and the two original firms cease to exist,a(n)_________________________ is accomplished.

Accepted Answer

A) acquisition 
B) strategic alliance 
C) joint venture 
D) merger 
A) acquisition 
B) strategic alliance 
C) joint venture 
D) merger

Question 2

How can firms constructively react to overcapacity?

Accepted Answer

A) Firms can invest to modernize facilities and production facilities. 
B) Firms can merge with firms that need addition capacity so that the capacity of the two firms balances out. 
C) Firms can identify unproductive or underproductive assets and obtain the salvage value of those assets. 
D) Firms can offshore or outsource to rid themselves of overcapacity. 
A) Firms can invest to modernize facilities and production facilities. 
B) Firms can merge with firms that need addition capacity so that the capacity of the two firms balances out. 
C) Firms can identify unproductive or underproductive assets and obtain the salvage value of those assets. 
D) Firms can offshore or outsource to rid themselves of overcapacity.

Question 3

In valuing a target of a merger or acquisition,the WACC is used to:

Accepted Answer

A) discount free cash flow and salvage values. 
B) value all assets of the target. 
C) determine the political risk that the target faces. 
D) determine the future value of the assets of the target. 
A) discount free cash flow and salvage values. 
B) value all assets of the target. 
C) determine the political risk that the target faces. 
D) determine the future value of the assets of the target.

Question 4

How can owning a minority interest in another firm benefit the firm that owns the minority interest.

Accepted Answer

A) Owning a minority interest in a firm does not cost as much as acquiring a controlling interest,but the minority interest gives the firm owning a minority interest some input into the operation of the firm in which it owns a minority interest. 
B) Owning a minority interest in a firm gives the firm owning the minority interest the first right of refusal to increase its ownership to a controlling interest. 
C) Owning a minority interest in a firm gives the firm owning the minority interest the opportunity to control the election of directors and thereby control the firm. 
D) Owning a minority interest in a firm gives the firm owning the minority interest enough control to merge with any firm other than the firm owning a minority interest. 
A) Owning a minority interest in a firm does not cost as much as acquiring a controlling interest,but the minority interest gives the firm owning a minority interest some input into the operation of the firm in which it owns a minority interest. 
B) Owning a minority interest in a firm gives the firm owning the minority interest the first right of refusal to increase its ownership to a controlling interest. 
C) Owning a minority interest in a firm gives the firm owning the minority interest the opportunity to control the election of directors and thereby control the firm. 
D) Owning a minority interest in a firm gives the firm owning the minority interest enough control to merge with any firm other than the firm owning a minority interest.

Question 5

Typically,joint ventures conduct:

Accepted Answer

A) a full spectrum of needed business activities,including financing,production and distribution. 
B) only the business activities that cannot be performed by the entities creating the joint venture. 
C) all of the business activities that are allowed where the joint venture operates,but not financing activities,which are conducted by the entities that formed the joint venture. 
D) only the business activities that the joint venture can perform more efficiently than the entities that created the joint venture. 
A) a full spectrum of needed business activities,including financing,production and distribution. 
B) only the business activities that cannot be performed by the entities creating the joint venture. 
C) all of the business activities that are allowed where the joint venture operates,but not financing activities,which are conducted by the entities that formed the joint venture. 
D) only the business activities that the joint venture can perform more efficiently than the entities that created the joint venture.

Question 6

If an MNC and a local firm form a joint venture,and the local firm has an option to take over the joint venture,the local firm is said to have a:

Accepted Answer

A) investment opportunity. 
B) convertible option. 
C) call option. 
D) participating option. 
A) investment opportunity. 
B) convertible option. 
C) call option. 
D) participating option.

Question 7

How is outsourcing related to a firm's core competencies?

Accepted Answer

A firm outsources when it contracts with

Question 8

How does a nation limit foreign investment in the industries that the nation considers to be sensitive?

Accepted Answer

A) Firms in sensitive industries are typically owned by the government and foreign investment is limited to short-term loans to firms in sensitive industries. 
B) Foreign investment in a nation's sensitive industries is usually limited to minority ownership in a firm in a sensitive industry. 
C) Foreign investors in firms in sensitive industries in a nation are usually required to place their ownership interests in those firms in trust with a government agency. 
D) Any foreign investment in a firm in a sensitive industry must be approved by the government that considers the industry to be sensitive. 
A) Firms in sensitive industries are typically owned by the government and foreign investment is limited to short-term loans to firms in sensitive industries. 
B) Foreign investment in a nation's sensitive industries is usually limited to minority ownership in a firm in a sensitive industry. 
C) Foreign investors in firms in sensitive industries in a nation are usually required to place their ownership interests in those firms in trust with a government agency. 
D) Any foreign investment in a firm in a sensitive industry must be approved by the government that considers the industry to be sensitive.

Question 9

Methods of determining the value of a target in a merger or acquisition include:

Accepted Answer

A) the discounted cash flow method and the price-earnings method. 
B) the weighted average cost of capital method and the discounted cash flow method. 
C) the present value method and the price-earnings method. 
D) the discounted cash flow method and the earnings-per-share method. 
A) the discounted cash flow method and the price-earnings method. 
B) the weighted average cost of capital method and the discounted cash flow method. 
C) the present value method and the price-earnings method. 
D) the discounted cash flow method and the earnings-per-share method.

Question 10

When a firm that is seeking to acquire another firm analyzes data about the target firm seeking to confirm the value target firm,the acquiring firm is:

Accepted Answer

A) confirming valuation data. 
B) satisfying requirements of the country where the target firm is located. 
C) conducting due diligence. 
D) completing the merger package. 
A) confirming valuation data. 
B) satisfying requirements of the country where the target firm is located. 
C) conducting due diligence. 
D) completing the merger package.

Question 11

A real option that is often involved in a joint venture is the option to:

Accepted Answer

A) bring other entities into the joint venture once it has been established. 
B) take control of the joint venture. 
C) end the joint venture without the consent of the other entities involved in the joint venture. 
D) invest more capital in the joint venture so that it can pursue new opportunities. 
A) bring other entities into the joint venture once it has been established. 
B) take control of the joint venture. 
C) end the joint venture without the consent of the other entities involved in the joint venture. 
D) invest more capital in the joint venture so that it can pursue new opportunities.

When two firms combine to form a new firm,and the two original firms cease to exist,a(n)_________________________ is accomplished.

How can firms constructively react to overcapacity?

In valuing a target of a merger or acquisition,the WACC is used to:

How can owning a minority interest in another firm benefit the firm that owns the minority interest.

Typically,joint ventures conduct:

If an MNC and a local firm form a joint venture,and the local firm has an option to take over the joint venture,the local firm is said to have a:

How is outsourcing related to a firm's core competencies?

How does a nation limit foreign investment in the industries that the nation considers to be sensitive?

Methods of determining the value of a target in a merger or acquisition include:

When a firm that is seeking to acquire another firm analyzes data about the target firm seeking to confirm the value target firm,the acquiring firm is:

A real option that is often involved in a joint venture is the option to:

Introduction

International Financial Markets: Structure and Innovation

Currency and Eurocurrency Derivatives

Currency Systems and Valuation

Currency Parity Conditions

Currency Risk Exposure Measurement

Currency Exposure Management

Capital Budgeting

Advanced Capital Budgeting

Long-Term Financing

Optimizing and Financing Working Capital

International Trade

International Taxation and Accounting

International Portfolio Investments

Filters

Exam 12: International Alliances and Acquisitions

When two firms combine to form a new firm,and the two original firms cease to exist,a(n)_________________________ is accomplished.

How can firms constructively react to overcapacity?

In valuing a target of a merger or acquisition,the WACC is used to:

How can owning a minority interest in another firm benefit the firm that owns the minority interest.

Typically,joint ventures conduct:

If an MNC and a local firm form a joint venture,and the local firm has an option to take over the joint venture,the local firm is said to have a:

How is outsourcing related to a firm's core competencies?

How does a nation limit foreign investment in the industries that the nation considers to be sensitive?

Methods of determining the value of a target in a merger or acquisition include:

When a firm that is seeking to acquire another firm analyzes data about the target firm seeking to confirm the value target firm,the acquiring firm is:

A real option that is often involved in a joint venture is the option to:

Introduction

International Financial Markets: Structure and Innovation

Currency and Eurocurrency Derivatives

Currency Systems and Valuation

Currency Parity Conditions

Currency Risk Exposure Measurement

Currency Exposure Management

Capital Budgeting

Advanced Capital Budgeting

Long-Term Financing

Optimizing and Financing Working Capital

International Trade

International Taxation and Accounting

International Portfolio Investments

Filters