Question 1

Define patient and impatient capitalism and discuss how each may lead to different decision-making in the shareholder wealth maximization model.

Accepted Answer

The answer of Define patient and impatient capitalism and discuss...

Question 2

When discussing the structure of corporate governance, the authors distinguish between internal and external factors. ________ is an example of an internal factor, and ________ is an example of an external factor.

Accepted Answer

A)  Equity markets; executive management 
B)  Debt markets; board of directors 
C)  Executive management; auditors 
D)  Auditors; regulators

Question 3

Which of the following is NOT a source of new stock exchange listing additions?

Accepted Answer

A)  initial public offerings 
B)  movements of share listings from one exchange to another 
C)  spinouts from larger firms 
D)  All of the above are sources.

Question 4

Systematic risk can be eliminated through portfolio diversification.

Accepted Answer

A) True 
 B)False

Question 5

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.

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

Question 7

The goal of all international corporations is to maximize shareholder wealth.

Accepted Answer

A) True 
 B)False

Question 8

Patient Capitalism is characterized by short-term focus by both management and investors.

Accepted Answer

A) True 
 B)False

Question 9

Signed into law on July 30, 2002, the ________ Act requires CEOs of publicly traded companies to vouch for the veracity of the firm's published financial statements.

Accepted Answer

A)  Smoot-Hawley 
B)  Humphrey-Hawkins 
C)  McCain-Merrill 
D)  Sarbanes-Oxley

Question 10

State Owned Enterprises (SOEs) by their very name cannot be traded on stock exchanges because they are government owned.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  the government 
B)  families 
C)  individuals 
D)  publicly traded, widely-held organizations

Question 12

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 2015.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is NOT a delisting category?

Accepted Answer

A)  forced delistings 
B)  mergers 
C)  acquisitions 
D)  All of the above are categories of delistings.

Question 14

The deliberation of the of the process demonstrated in the European-Japanese system of corporate governance has sometimes been termed:

Accepted Answer

A)  socialism. 
B)  impatient capital. 
C)  patient capital. 
D)  communism.

Question 15

The stakeholder capitalism model assumes that only systematic risk "counts" or is a prime concern for management.

Accepted Answer

A) True 
 B)False

Question 16

In recent years the trend has been for markets to increasing focus on the global stakeholders.

Accepted Answer

A) True 
 B)False

Question 17

"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

Question 18

State Owned Enterprises (SOEs):

Accepted Answer

A)  are a form of public ownership. 
B)  are created for commercial activities rather than civil or social activities. 
C)  are the dominant form of business organization in some countries. 
D)  are all of the above.

Question 19

With shareholder wealth maximization as the manager's goal, capital may be termed:

Accepted Answer

A)  impatient. 
B)  patient. 
C)  borrowed. 
D)  bought.

Question 20

PolyProduction Inc. has two classes of common stock. Class A has 5 million shares with 10 votes per share. Class B has 5 million shares with 1 vote per share. If the dividends per share are equal for both class A and B stock, then Class A shareholders have ________ of the votes and ________ of the dividends.

Accepted Answer

A)  90.91%; 90.91% 
B)  90.91%; 50.00% 
C)  50.00%; 50.00% 
D)  83.33%; 33.33%

Exam 4: Financial Goals and Corporate Governance

Define patient and impatient capitalism and discuss how each may lead to different decision-making in the shareholder wealth maximization model.

When discussing the structure of corporate governance, the authors distinguish between internal and external factors. is an example of an internal factor, and is an example of an external factor.

Which of the following is NOT a source of new stock exchange listing additions?

Systematic risk can be eliminated through portfolio diversification.

The primary operational goal for the firm is to:

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

The goal of all international corporations is to maximize shareholder wealth.

Patient Capitalism is characterized by short-term focus by both management and investors.

Signed into law on July 30, 2002, the ________ Act requires CEOs of publicly traded companies to vouch for the veracity of the firm's published financial statements.

State Owned Enterprises (SOEs) by their very name cannot be traded on stock exchanges because they are government owned.

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

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 2015.

Which of the following is NOT a delisting category?

The deliberation of the of the process demonstrated in the European-Japanese system of corporate governance has sometimes been termed:

The stakeholder capitalism model assumes that only systematic risk "counts" or is a prime concern for management.

In recent years the trend has been for markets to increasing focus on the global stakeholders.

"Maximize corporate wealth":

State Owned Enterprises (SOEs) :

With shareholder wealth maximization as the manager's goal, capital may be termed:

PolyProduction Inc. has two classes of common stock. Class A has 5 million shares with 10 votes per share. Class B has 5 million shares with 1 vote per share. If the dividends per share are equal for both class A and B stock, then Class A shareholders have of the votes and of the dividends.