Question 1

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 2

According to recent research,family-owned firms in some highly-developed economies typically outperform publicly-owned firms.

Accepted Answer

A) True 
 B)False

Question 3

Unsystematic risk can be defined as:

Accepted Answer

A)  the total risk to the firm. 
B)  the risk of the individual security. 
C)  the added risk that a firm's shares bring to a diversified portfolio. 
D)  the risk of the market in general.

Question 4

The Shareholder Wealth Maximization Model (SWM):

Accepted Answer

A)  combines the interests and inputs of shareholders, creditors, management, employees, and society. 
B)  is being usurped by the Stakeholder Capitalism Model as those types of MNEs dominate their global industry segments. 
C)  clearly places shareholders as the primary stakeholder. 
D)  is the dominant form of corporate management in the European-Japanese governance system.

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

The answer of Describe the management objectives of a firm...

Question 6

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 7

Systematic risk can be eliminated through portfolio diversification.

Accepted Answer

A) True 
 B)False

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

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 10

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.

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

In the Anglo-American model of corporate governance,the primary goal of management is to:

Accepted Answer

A)  maximize the wealth of all stakeholders. 
B)  maximize shareholder wealth. 
C)  minimize costs. 
D)  minimize risk.

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

Which of the following is generally NOT considered to be a viable operational goal for a firm?

Accepted Answer

A)  maintaining a strong local currency 
B)  maximization of after-tax income 
C)  minimization of the firm's effective global tax burden 
D)  correct positioning of the firm's income, cash flows and available funds as to country and currency

Question 15

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 16

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

Accepted Answer

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

Question 17

The stakeholder capitalism model (SCM)holds that total risk (operational and financial)is more important than just systematic risk.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is NOT commonly associated with a government affiliated form of corporate governance regime?

Accepted Answer

A)  no minority influence 
B)  lack of transparency 
C)  state ownership of enterprise 
D)  All are associated with this type of corporate governance regime.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

According to recent research,family-owned firms in some highly-developed economies typically outperform publicly-owned firms.

Accepted Answer

A) True 
 B)False

Exam 4: Financial Goals and Corporate Governance

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

According to recent research,family-owned firms in some highly-developed economies typically outperform publicly-owned firms.

Unsystematic risk can be defined as:

The Shareholder Wealth Maximization Model (SWM) :

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.

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

Systematic risk can be eliminated through portfolio diversification.

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?

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

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

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

In the Anglo-American model of corporate governance,the primary goal of management is to:

Which of the following is NOT a delisting category?

Which of the following is generally NOT considered to be a viable operational goal for a firm?

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.

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

The stakeholder capitalism model (SCM)holds that total risk (operational and financial)is more important than just systematic risk.

Which of the following is NOT commonly associated with a government affiliated form of corporate governance regime?

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

According to recent research,family-owned firms in some highly-developed economies typically outperform publicly-owned firms.