Question 1

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 2

Which of the following is NOT true regarding the stakeholder capitalism model?

Accepted Answer

A)  Banks and other financial institutions are less important creditors than securities markets. 
B)  Labor unions are more powerful than in the Anglo-American markets. 
C)  Governments interfere more in the marketplace to protect important stakeholder groups. 
D)  All of the above are TRUE.

Question 3

In the stakeholder capitalism model (SCM) the assumption of market efficiency is absolutely critical.

Accepted Answer

A) True 
 B)False

Question 4

In the U.S. and U.K. stock markets are characterized by ownership of firms concentrated in the hands of a few controlling shareholders. In contrast, the rest of the world tends to have more widespread ownership of shares.

Accepted Answer

A) True 
 B)False

Question 5

The decline of share listings in the United States has led to considerable debate over whether these trends represent a fundamental global business shift away from the publicly traded corporate form, or something that is more U.S.-centric combined with the economic times. Develop an argument to why the decline happened.

Accepted Answer

The answer of The decline of share listings in the...

Question 6

Although there are many different cultural and legal approaches used in corporate governance worldwide, there is a growing consensus on what constitutes good corporate governance. List and explain at least three standardized common principles of good corporate governance.

Accepted Answer

The answer of Although there are many different cultural and...

Question 7

One of the most challenging issues in the financial management of the enterprise is the possible separation of ownership from management resulting in the so-called principal agent problem. Define the agency problem, explain possible ways to alleviate the agency problem and discuss differences in across global markets.

Accepted Answer

The answer of One of the most challenging issues in...

Question 8

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

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

Exam 4: Financial Goals and Corporate Governance

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.

Which of the following is NOT true regarding the stakeholder capitalism model?

In the stakeholder capitalism model (SCM) the assumption of market efficiency is absolutely critical.

In the U.S. and U.K. stock markets are characterized by ownership of firms concentrated in the hands of a few controlling shareholders. In contrast, the rest of the world tends to have more widespread ownership of shares.

Although there are many different cultural and legal approaches used in corporate governance worldwide, there is a growing consensus on what constitutes good corporate governance. List and explain at least three standardized common principles of good corporate governance.

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?

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