Question 1

"Maximize corporate wealth":

Accepted Answer

A) is the primary objective of the non-Anglo-American model of management. 
B) as a management objective treats shareholders on a par with other corporate stakeholders such as creditors, labor, and local community. 
C) has a broader definition than just financial wealth. 
D) all of the above 
A) is the primary objective of the non-Anglo-American model of management. 
B) as a management objective treats shareholders on a par with other corporate stakeholders such as creditors, labor, and local community. 
C) has a broader definition than just financial wealth. 
D) all of the above

Question 2

Which of the following is a reason why managers act to maximize shareholder wealth in Anglo-American markets?

Accepted Answer

A) the use of stock options to align the goals of shareholders and managers 
B) the market for corporate control that allows for outside takeover of the firm 
C) performance based compensation for executive management 
D) all of the above 
A) the use of stock options to align the goals of shareholders and managers 
B) the market for corporate control that allows for outside takeover of the firm 
C) performance based compensation for executive management 
D) all of the above

Question 3

Having Anglo-Americans as members of the board of directors of a non-Anglo-American firm signals poor corporate governance in the firm.

Accepted Answer

A) True 
 B)False

Question 4

The stakeholder capitalism model does not assume that equity markets are either efficient or inefficient.

Accepted Answer

A) True 
 B)False

Question 5

Describe the management objectives of a firm governed by the shareholder wealth maximization model and one governed by the stakeholder wealth maximization model. Give an example of how these two models may lead to different decision-making by executive management.

Accepted Answer

Shareholder wealth maximization attempts

Question 6

Which of the following is NOT typically associated with the public ownership of business organizations?

Accepted Answer

A) the state 
B) the government 
C) families 
D) civil society 
A) the state 
B) the government 
C) families 
D) civil society

Question 7

The primary operational goal for the firm is to:

Accepted Answer

A) maximize after-tax profits in each country where the firm is operating. 
B) minimize the total financial risk to the firm. 
C) maximize the consolidated after-tax profits of the firm. 
D) maximize the total risk to the firm. 
A) maximize after-tax profits in each country where the firm is operating. 
B) minimize the total financial risk to the firm. 
C) maximize the consolidated after-tax profits of the firm. 
D) maximize the total risk to the firm.

Question 8

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 9

The relatively low cost of compliance with the Sarbanes-Oxley Act (SOX)has been a surprising benefit of the act.

Accepted Answer

A) True 
 B)False

Question 10

Non-Anglo-American markets are dominated by the "one-vote-one-share" rule.

Accepted Answer

A) True 
 B)False

Question 11

Dividend yield is the change in the share price of stock as traded in the public equity markets.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following broad topics is NOT identified as an area to be established as good corporate governance practice by the Organization for Economic Cooperation and Development (OECD)?

Accepted Answer

A) protect the rights of shareholders 
B) disclosure and transparency 
C) the proper role of stakeholders in the governance of the firm 
D) All of the above should be a concern of good corporate governance. 
A) protect the rights of shareholders 
B) disclosure and transparency 
C) the proper role of stakeholders in the governance of the firm 
D) All of the above should be a concern of good corporate governance.

Question 13

Agency theory states that unsystematic risk can be eliminated through diversification.

Accepted Answer

A) True 
 B)False

Question 14

The problems that may arise due to the separation of ownership and management in large business organizations is know as:

Accepted Answer

A) separation anxiety. 
B) the agency problem. 
C) corporate disconnect theory. 
D) none of the above 
A) separation anxiety. 
B) the agency problem. 
C) corporate disconnect theory. 
D) none of the above

Question 15

Privatization is a term used to describe:

Accepted Answer

A) firms that are purchased by the government. 
B) government operations that are purchased by corporations and other investors. 
C) firms that do not use publicly available debt. 
D) non-public meetings held by members of interlocking directorates. 
A) firms that are purchased by the government. 
B) government operations that are purchased by corporations and other investors. 
C) firms that do not use publicly available debt. 
D) non-public meetings held by members of interlocking directorates.

Question 16

Under the Shareholder Wealth Maximization Model (SWM)of corporate governance, poor firm performance is likely to be faced with all but which of the following?

Accepted Answer

A) sale of shares by disgruntled current shareholders 
B) shareholder activism to attempt a change in current management 
C) as a maximum threat, initiation of a corporate takeover 
D) prison time for executive management 
A) sale of shares by disgruntled current shareholders 
B) shareholder activism to attempt a change in current management 
C) as a maximum threat, initiation of a corporate takeover 
D) prison time for executive management

Question 17

Which of the following is NOT a possible and appropriate response by shareholders dissatisfied with existing firm management of a publicly traded firm?

Accepted Answer

A) Shareholders could sell their shares of stock. 
B) Shareholders could remain quietly disgruntled. 
C) Shareholders, perhaps with the help of others, could attempt to initiate a takeover. 
D) All of these responses may be possible and appropriate. 
A) Shareholders could sell their shares of stock. 
B) Shareholders could remain quietly disgruntled. 
C) Shareholders, perhaps with the help of others, could attempt to initiate a takeover. 
D) All of these responses may be possible and appropriate.

Question 18

Regarding comparative corporate governance regimes: Bank-based regimes characterized by government influence in bank lending and a lack of transparency is often found in countries such as Korea and Germany.

Accepted Answer

A) True 
 B)False

Question 19

U.S. listings of publicly traded firms as a percentage of worldwide listings of such firms INCREASED from 11% in 1996 to approximately 33% in 2010.

Accepted Answer

A) True 
 B)False

Question 20

Anglo-American markets is a term used to describe business markets in:

Accepted Answer

A) North, Central, and South America. 
B) the United States, Canada, and Western Europe. 
C) the United States, United Kingdom, Canada, Australia and New Zealand. 
D) the United States, France, Britain, and Germany. 
A) North, Central, and South America. 
B) the United States, Canada, and Western Europe. 
C) the United States, United Kingdom, Canada, Australia and New Zealand. 
D) the United States, France, Britain, and Germany.

"Maximize corporate wealth":

Which of the following is a reason why managers act to maximize shareholder wealth in Anglo-American markets?

Having Anglo-Americans as members of the board of directors of a non-Anglo-American firm signals poor corporate governance in the firm.

The stakeholder capitalism model does not assume that equity markets are either efficient or inefficient.

Describe the management objectives of a firm governed by the shareholder wealth maximization model and one governed by the stakeholder wealth maximization model. Give an example of how these two models may lead to different decision-making by executive management.

Which of the following is NOT typically associated with the public ownership of business organizations?

The primary operational goal for the firm is to:

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

The relatively low cost of compliance with the Sarbanes-Oxley Act (SOX)has been a surprising benefit of the act.

Non-Anglo-American markets are dominated by the "one-vote-one-share" rule.

Dividend yield is the change in the share price of stock as traded in the public equity markets.

Which of the following broad topics is NOT identified as an area to be established as good corporate governance practice by the Organization for Economic Cooperation and Development (OECD)?

Agency theory states that unsystematic risk can be eliminated through diversification.

The problems that may arise due to the separation of ownership and management in large business organizations is know as:

Privatization is a term used to describe:

Under the Shareholder Wealth Maximization Model (SWM)of corporate governance, poor firm performance is likely to be faced with all but which of the following?

Which of the following is NOT a possible and appropriate response by shareholders dissatisfied with existing firm management of a publicly traded firm?

Regarding comparative corporate governance regimes: Bank-based regimes characterized by government influence in bank lending and a lack of transparency is often found in countries such as Korea and Germany.

U.S. listings of publicly traded firms as a percentage of worldwide listings of such firms INCREASED from 11% in 1996 to approximately 33% in 2010.

Anglo-American markets is a term used to describe business markets in:

Current Multinational Challenges and the Global Economy

The International Monetary System

The Balance of Payments

The Continuing Global Financial Crisis

The Foreign Exchange Theory and Markets

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction Exposure

Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Raising Equity and Debt Globally

Multinational Tax Management

International Portfolio Theory and Diversification

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Working Capital Management

International Trade Finance

Filters

Exam 2: Corporate Ownership, Goals, and Governance

"Maximize corporate wealth":

Which of the following is a reason why managers act to maximize shareholder wealth in Anglo-American markets?

Having Anglo-Americans as members of the board of directors of a non-Anglo-American firm signals poor corporate governance in the firm.

The stakeholder capitalism model does not assume that equity markets are either efficient or inefficient.

Describe the management objectives of a firm governed by the shareholder wealth maximization model and one governed by the stakeholder wealth maximization model. Give an example of how these two models may lead to different decision-making by executive management.

Which of the following is NOT typically associated with the public ownership of business organizations?

The primary operational goal for the firm is to:

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

The relatively low cost of compliance with the Sarbanes-Oxley Act (SOX)has been a surprising benefit of the act.

Non-Anglo-American markets are dominated by the "one-vote-one-share" rule.

Dividend yield is the change in the share price of stock as traded in the public equity markets.

Which of the following broad topics is NOT identified as an area to be established as good corporate governance practice by the Organization for Economic Cooperation and Development (OECD)?

Agency theory states that unsystematic risk can be eliminated through diversification.

The problems that may arise due to the separation of ownership and management in large business organizations is know as:

Privatization is a term used to describe:

Under the Shareholder Wealth Maximization Model (SWM)of corporate governance, poor firm performance is likely to be faced with all but which of the following?

Which of the following is NOT a possible and appropriate response by shareholders dissatisfied with existing firm management of a publicly traded firm?

Regarding comparative corporate governance regimes: Bank-based regimes characterized by government influence in bank lending and a lack of transparency is often found in countries such as Korea and Germany.

U.S. listings of publicly traded firms as a percentage of worldwide listings of such firms INCREASED from 11% in 1996 to approximately 33% in 2010.

Anglo-American markets is a term used to describe business markets in:

Current Multinational Challenges and the Global Economy

The International Monetary System

The Balance of Payments

The Continuing Global Financial Crisis

The Foreign Exchange Theory and Markets

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction Exposure

Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Raising Equity and Debt Globally

Multinational Tax Management

International Portfolio Theory and Diversification

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Working Capital Management

International Trade Finance

Filters