Question 1 1 pts A capital market system of corporate governance has less string

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Question 1

1 pts

A capital market system of corporate governance has less stringent disclosure requirements than a financial intermediary system.

Tru

False

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Question 2

1 pts

The Sarbanes Oxley Act of 2002 was a response to overzealous hostile takeover action.

True

False

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Question 3

1 pts

The Gillan article makes it clear that a standard definition of corporate governance is used by practitioners and business researchers from multiple areas.

True

False

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Question 4

1 pts

According to Gillan, which of the following is not a category of internal corporate governance?

Bylaw and charter provisions

Board of directors

Internal control systems

Capital structure

All of the above are internal corporate governance categories.

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Question 5

1 pts

A reason for acquisitions is synergy. Synergy includes:

revenue enhancements.

cost reductions.

lower taxes.

all of these.

none of the above.

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Question 6

1 pts

Firm A and Firm B merge to form firm AB. This is an example of:

a tender offer.

an acquisition of assets.

an acquisition of stock.

a consolidation.

both b and c.

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Question 7

1 pts

If two leveraged firms merge, the cost of debt for the new firm will generally be lower than it was for the two firms as separate entities. One reason for this is:

strategic fits.

net operating losses.

surplus funds.

co-insurance.

none of the above.

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Question 8

1 pts

Skip to question text.

Large business combinations in Japan are normally carried out through reciprocal ownership of common stock. These networks, or keiretsu, involve a large number of diversified companies centered around a large bank, industrial firm or trading firm. One of the main benefits of this structure is argued to be:

the monopolistic control of economic segments.

the reduction of financial distress costs due to ease of restructuring an agreement.

large scale diversification that cannot be done by individual shareholders.

greater efficiency in management because the management skills are homogeneous even for diversified industries.

none of the above.

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Question 9

1 pts

Suppose that General Motors has made an offer to acquire General Mills. Ignoring potential antitrust problems, this merger would be classified as a:

monopolistic merger.

horizontal merger.

vertical merger.

conglomerate merger.

none of the above.

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Question 10

1 pts

A dissident group solicits votes in an attempt to replace existing management. This is called a:

tender offer.

shareholder derivative action.

proxy fight.

management freeze-out.

none of the above.

Tru

False

Explanation / Answer

Q.no.

Answer

1

FALSE

2

TRUE

3

TRUE

4

Internal control system

5

All of these

6

Both b and c

7

Strategic fits

8

Greater efficiency in management because the management skills are homogeneous even for diversified industries.

9

Horizontal merger

10

Proxy fight

Q.no.

Answer

1

FALSE

2

TRUE

3

TRUE

4

Internal control system

5

All of these

6

Both b and c

7

Strategic fits

8

Greater efficiency in management because the management skills are homogeneous even for diversified industries.

9

Horizontal merger

10

Proxy fight

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