Archives: Quiz
Human Resources Chapter 12 3 Which of the following types of incentive plans are specifically designed to promote group performance
54. Straight commission plans: A. imply that the employees receive a straight salary. B. are useful when the organization wants salespeople to concentrate on listening to customers. C. help to attract employees risk-averse employees. D. are common among insurance and […]
Finance Chapter 16 1 When there are no taxes and capital markets function well, the market value of a company does not depend on its capital structure
1. When there are no taxes and capital markets function well, the market value of a company does not depend on its capital structure. TRUE AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 16-01 Show why […]
Human Resources Chapter 12 2 Martin owns and manages a small auto-parts shop. He determines the time required to complete each task in his shop
33. As an incentive to work efficiently, some organizations pay production workers a ____, a wage based on the amount they produce. A. merit pay B. commission C. standard hour pay D. piecework rate E. special bonus As an incentive […]
Finance Chapter 15 3 What is the primary reason for a reduction in share value after a successful rights issue? The new shares
AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 15-04 Describe how companies may make private placements of securities. Topic: Rights offerings 83. What is the primary reason for a reduction in share value after a […]
Finance Chapter 15 2 What would you expect to be the market price of stock after a sold-out rights issue, if each existing shareholder purchases
48. What would you expect to be the market price of stock after a sold-out rights issue, if each existing shareholder purchases one new share at $60 for each three that he or she currently holds, and the current share […]
Finance Chapter 15 1 Equity capital in young businesses is known as venture capital and it is provided by venture capital firms, wealthy individuals
1. Equity capital in young businesses is known as venture capital and it is provided by venture capital firms, wealthy individuals, and investment institutions such as pension funds. TRUE AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning […]
Human Resources Chapter 11 4 Assuming an organization wants to motivate employees through promotions, and assuming enough opportunities for promotions are available
73. (p. 356) _____ are sets of jobs having similar worth or content, grouped together to establish rates of pay. A. Pay scales B. Pay ranges C. Pay differentials D. Pay levels E. Pay grades A large organization could have […]
Finance Chapter 15 4 What are some of the significant issues that arise when established firms make a general cash offer or a private placement of securities
103. What are the benefits of shelf registration to corporations? 1. Securities can be issued in dribs and drabs without incurring excessive costs. 2. Securities can be issued on short notice. 3. Security issues can be timed to take advantage […]
Finance Chapter 14 4 What procedures are used for elections to a firm’s board of directors and other matters put to shareholders
105. If financial markets were not efficient, it would be more likely for firms to: A. finance investments in a zero-NPV transaction. B. finance investments in a positive NPV transaction. C. totally avoid the need for external financing. D. finance […]
Human Resources Chapter 11 2 Decisions about how to respond to the economic forces of product markets and labor markets limit an organization’s choices about:
33. (p. 344) Which of the following permits a lower training wage, which employers may pay to workers under the age of 20 for a period of up to 90 days? A. FLSA B. ADA C. FMLA D. ERISA E. […]
Finance Chapter 14 3 How does competition in financial markets compare to the competition that can be found in product markets
AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 14-05 Describe the major classes of securities sold by the firm. Topic: Tax effects on dividends and payouts 83. Which one of the following statements is correct […]
Finance Chapter 14 2 Which one of these terms applies to the bundling of a group of loans with the subsequent sale of the cash flows from those loans
46. A corporation’s net worth is composed of the: A. book value of common equity plus par value of debt. B. par value plus additional paid-in capital. C. retained earnings less treasury stock. D. book value of common equity plus […]
Finance Chapter 14 1 Only a portion of the board of directors are up for election in any given year when a firm has a classified board
1. Only a portion of the board of directors are up for election in any given year when a firm has a classified board. TRUE AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 14-04 Describe voting […]
Human Resources Chapter 10 4 Selma is a single mother who works full-time and attends to the needs of her two young children
74. After an organization downsizes, it may expect so much of the remaining employees. This high expectation and demand results in a state of _____ for the employees. A. role autonomy B. role carve-out C. role underload D. role distance […]
Finance Chapter 13 4 How should the weighted-average cost of capital be applied to projects that are not average-risk projects
92. Plasti-tech Inc. is financed 60% with equity and 40% with debt. Currently, its debt has a pretax interest rate of 12%. Plasti-tech’s common stock trades at $15.00 per share and its most recent dividend was $1.00. Future dividends are […]
Human Resources Chapter 10 3 Adam, a neutral party outside of La Meares Inc., helped clarify issues between two technical teams of the company
53. Adam, a neutral party outside of La Meares Inc., helped clarify issues between two technical teams of the company. Though Adam’s solution had no binding power, both the teams decided to accept his solution. This is an example of […]
Finance Chapter 13 3 A proposed project has a positive NPV when evaluated at the company cost of capital. If the firm employs debt in its capital structure
70. Assume a firm’s debt is selling at face value. What is the firm’s cost of debt if the debt has a coupon rate of 7.5% and the tax rate is 35%? A. 4.88% B. 4.97% C. 5.21% D. 5.35% […]
Finance Chapter 18 2 To what extent does the Chesapeake transaction represent the benefits of free global trade and capital movements
countries, including Mexico, Russia, Japan, and South Korea. The firm also has announced that it will withdraw from other countries. Wal-Mart has shown considerable success in growing its international operations. Having expanded at a more disciplined pace than Carrefour, Wal-Mart […]
Human Resources Chapter 10 2 Thomas Fenton reprimanded five of his employees for coming to work drunk after a lunch outing
33. Thomas Fenton reprimanded five of his employees for coming to work drunk after a lunch outing. The next week, Thomas fired another employee for being drunk at work. The employees under Thomas can conclude a lack of _____ in […]
Finance Chapter 13 2 An increase in which one of the following is most apt to decrease the WACC of a firm that has both debt and equity in its capital structure
42. How much will a firm need in cash flow before tax and interest to satisfy debtholders and equityholders if the tax rate is 40%, there is $10 million in common stock requiring a 12% return, and $6 million in […]
Finance Chapter 18 1 Discuss the various types of adjustments for risk that might be made to the global CAPM before valuing a target firm in an emerging country
Chapter 18 Cross-Border Mergers and Acquisitions: Analysis and Valuation Answers to End of Chapter Discussion Questions 18.1 Discuss the circumstances under which a non-U.S. buyer may choose a U.S. corporate structure as its acquisition vehicle. A limited liability company? A […]
Finance Chapter 13 1 The company cost of capital is the expected rate of return that investors demand from the company’s assets and operations.
1. Capital structure refers to a firm’s mix of long-term debt and equity financing. TRUE AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-01 Calculate a firm’s capital structure. Topic: Capital structure 2. The company cost […]
Finance Chapter 17 2 To what extent do you believe the factors contributing to the airline’s bankruptcy were beyond the control of management
Photography Icon Kodak Declares Bankruptcy, A Victim of Creative Destruction Key Points Having invented the digital camera, Kodak knew that the longevity of its traditional film business was problematic. Concerned about protecting its core film business, Kodak was unable to […]
Finance Chapter 12 4 What is the relationship between the market risk of a security and the rate of return that investors demand of that security
106. The CAPM provides a model of determining expected security returns that is: A. precise in its calculations of risk premiums. B. imprecise, but generally an acceptable guideline. C. excellent for high beta stocks. D. excellent for all well-diversified portfolios. […]
Finance Chapter 17 1 Why would creditors make concessions to a debtor firm? Give examples of common types of concessions made
Chapter 17 Alternative Exit and Restructuring Strategies: Bankruptcy Reorganization and Liquidation Chapter Discussion Questions 17.1 Why would creditors make concessions to a debtor firm? Give examples of common types of concessions made? 17.2 Although most companies that file for bankruptcy […]
Finance Chapter 12 3 What would you recommend to an investor who is considering an investment that, according to its beta, plots below the security market line
AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 12-02 Relate the market risk of a security to the rate of return that investors demand. Topic: Security market line 77. A stock’s risk premium is equal […]
Finance Chapter 16 2 Why do you believe U.S. Steel may have decided to acquire Marathon Oil? Does this combination make economic sense
21 agreements to 37 suitors, with 10 actually submitting a preliminary bid by the deadline of February 22, 2011. Of the preliminary bids, four were for the entire company, three for recorded music, and three for music publishing. For the […]
Finance Chapter 12 2 You want to develop a portfolio containing U.S. Treasury bills and two stocks that is equally as risky as the market
50. You want to develop a portfolio containing U.S. Treasury bills and two stocks that is equally as risky as the market. The securities will be equally weighted. If the beta of the first stock is 1.23, what does the […]
Finance Chapter 16 1 What factors influence a parent firm’s decision to undertake a spin-off rather than a divestiture or equity carve-out
Chapter 16: Alternative Exit and Restructuring Strategies Divestitures, Spin-Offs, Carve-Outs, Split-Ups, and Split-Offs Answers to End of Chapter Discussion Questions 16.1 What are the advantages and disadvantages of tracking or target stocks to investors and to the firm? 16.2 How […]
Finance Chapter 12 1 The security market line sets a standard for other investments—investors will be willing to hold other investments only if they offer equally good
1. The capital asset pricing model (CAPM) assumes that the stock market is dominated by well-diversified investors who are concerned only with market risk. TRUE AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 12-02 Relate the […]
Finance Chapter 15 2 How would you estimate the market capitalization for Rosneft based on the terms of the share exchange
18 Exxon-Mobil and Russia’s Rosneft Create Artic Oil and Gas Exploration Joint Venture ________________________________________________________________ Key Points Contractual commitments in cross-border alliances are effective only to the extent they are enforced by each country’s legal system. The success of most alliances […]
Finance Chapter 11 4 When viewing the long-term trend of the price volatility of U.S. stocks, it is readily apparent that volatility has
AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 11-02 Calculate returns and standard deviation of returns for individual common stocks or for a stock portfolio. Topic: Standard deviation and variance 95. One common reason for […]
Finance Chapter 15 1 What are the advantages and disadvantages of the various organizational structures that could be employed to manage a business alliance
Chapter 15 Business Alliances: Joint Ventures, Partnerships, and Alliances Solutions to End of Chapter Discussion Questions 15.1 What is a limited liability company? What are its advantages and disadvantages? 15.2 Why is defining the scope of a business alliance important? […]
Human Resources Chapter 8 2 Which of the following criteria for determining the effectiveness of a performance management system is concerned
33. Which of the following criteria for determining the effectiveness of a performance management system is concerned with maximizing the overlap between actual job performance and job performance measure? A. Reliability B. Acceptability C. Specificity D. Validity E. Dependability Validity […]
Finance Chapter 11 3 In general, which stocks should be combined into a portfolio if the goal is the greatest reduction possible in overall portfolio risk
72. In general, which stocks should be combined into a portfolio if the goal is the greatest reduction possible in overall portfolio risk? A. Stocks with returns that are positively correlated B. Stocks with returns that are negatively correlated C. […]
Finance Chapter 14 2 How might the additional product and geographic diversity achieved by combining Mars and Wrigley benefit the combined firms
share for share exchange c. They provide useful information to determine the post transaction ownership distribution of the combined firms d. They are defined as the offer price divided by the acquirer share price 29. Assume that Acquirer pays $90 […]
Finance Chapter 11 2 The appropriate opportunity cost of capital is the return that investors give up on alternative investments that
43. The wider the dispersion of returns on a stock, the: A. lower the expected rate of return. B. higher the standard deviation. C. lower the real rate of return. D. lower the variance. AACSB: Reflective Thinking Accessibility: Keyboard Navigation […]
Finance Chapter 14 1 Give examples of the types of adjustments that might have to be made if the target company is part of a larger company
Chapter 14: Applying Financial Modeling To Value, Structure, and Negotiate Mergers and Acquisitions Answers to End of Chapter Discussion Questions 14.1 Why should a target company be valued as a standalone business? Give examples of the types of adjustments that […]
Finance Chapter 11 1 Long-term corporate bonds are the only portfolio of securities found to be riskier than common stocks
1. A market index is used to measure performance of a broad-based portfolio of stocks. TRUE AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 11-01 Estimate the opportunity cost of capital for an “average-risk” project. Topic: […]
Finance Chapter 13 1 How do loan and security covenants affect the way in which a leveraged buyout is managed? Note the differences between positive and negative covenants.
Chapter 13: FINANCING THE DEAL Private Equity, Hedge Funds, and Other Sources of Financing Answers to End of Chapter Discussion Questions 13.1 What are the primary ways in which a leveraged buyuot is financed? Answer: In a leveraged buyout, borrowed […]
Human Resources Chapter 8 4 If a student evaluating his/her professor at the end of term rates the professor low on all performance criteria due to dissatisfaction
73. A distributional error in which a rater favors lower rankings is known as _____. A. contrast error B. central tendency C. strictness D. leniency E. halo error Raters make distributional errors when they tend to use only one part […]
Finance Chapter 10 4 How are sensitivity, scenario, and break-even analysis used to see the effect of an error in forecasts on project profitability
102. Firms that lack competitive advantages will: A. have difficulty finding positive NPV projects for investment. B. be forced to capture larger market shares to be profitable. C. avoid the need to conduct sensitivity analyses. D. be forced to operate […]
Finance Chapter 13 3 Cerberus and Daimler will own 80.1% and 19.9% of Chrysler Holdings LLC, respectively. Why do you think the two parties agreed to this distribution of ownership
the United Auto Workers (UAW). Cerberus sought a deal similar to what the UAW accepted from Goodyear Tire and Rubber Company in late 2006. Under this agreement, the management of $1.2 billion in health-care liabilities was transferred to a fund […]
Human Resources Chapter 8 3 If a manager considers one employee at a time and circles a number/word to signify the degree to which that employee demonstrates a particular trait
53. If a manager considers one employee at a time and circles a number/word to signify the degree to which that employee demonstrates a particular trait, he/she is using a: A. mixed-standard scale. B. critical-incident approach. C. graphic rating scale. […]
Finance Chapter 10 3 Which one of the following is most likely the reason why many projects fail to earn their projected rates of return
AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 10-03 Understand why an overestimate of sales is more serious for projects with high operating leverage. Topic: Operating leverage 76. A decision tree shows a 30% probability […]
Finance Chapter 13 2 What is the acquisition vehicle, post-closing organization, form of payment, form of acquisition, and tax strategy described in this case study
21 Pep Boys, a U.S. auto parts and repair business, operates more than 7,000 service bays in over 700 locations in 35 states and Puerto Rico. With its share price lagging the overall stock market in recent years, the firm’s […]
Human Resources Chapter 7 5 Trainees are likely to respond more positively to which of the following approaches of diversity training
89. Trainees are likely to respond more positively to which of the following approaches of diversity training? A. Increasing participants’ awareness of cultural and ethnic differences as well as differences in personal and physical characteristics, such as disabilities. B. Teaching […]
Finance Chapter 10 2 What effect will a reduction in the cost of capital have on the accounting break-even level of revenues
46. Weston’s has variable costs that average 68% of sales. If fixed costs increase by $1, what will be the increase in the break-even level of revenues? A. An increase of $0.68 B. An increase of $1.00 C. An increase […]
Finance Chapter 12 2 What is the importance of the closing conditions in the merger agreement? What could happen if any of the closing conditions are breached
15 categories, such as a substantial women’s healthcare business. The merger also is a response to the ongoing global trend of consolidation among the purchasers of pharmaceutical products as governments are increasingly becoming the primary purchaser of generic drugs. Under […]
Human Resources Chapter 7 4 Training designed to prepare employees to perform their jobs effectively, learn about the organization
76. The difficulty level of written materials is known as: A. severability. B. scalability. C. modularity. D. interoperability. E. readability. Written materials should have an appropriate reading level. A simple way to assess readability— the difficulty level of written materials—is […]