Archives: Quiz
Banking Chapter 16 1 In deciding to sell a business, a parent firm should compare the business’ after-tax value in sale with its pre-tax value to the parent as part of the parent.
Chapter 16: Alternative Exit and Restructuring Strategies Divestitures, Spin-Offs, Carve-Outs, Split-Ups, and Split-Offs Examination Questions and Answers 1. Divestitures, spin-offs, equity carve-outs, split-ups, and bust-ups are commonly used strategies to exit businesses. True or False 2. Empirical studies show that […]
Banking Chapter 15 2 In your opinion, what were the motivations for forming the Disney-Pixar partnership in 1995? Which partner do you believe had the greatest leverage in these negotiations
12 3. How do you believe the ownership distribution for MillersCoors was determined? While both firms were significantly less profitable than Anheuser, SAB was larger and more profitable than Molson Coors in the U.S. Consequently, it is likely that the […]
Economics Chapter 19 1 What is the difference between farm commodities and food products? How does the number of competing firms change as farm commodities are processed into food
Chapter 19 – Agriculture: Economics and Policy 19-1 CHAPTER 19 Agriculture: Economics and Policy A. Short-Answer, Essays, and Problems 1. Describe the diversity in the agriculture industry as it relates to farm commodities. 2. What is the difference between farm […]
Banking Chapter 15 1 Major motivations for business alliances include risk sharing as well as gaining access to new markets and skills.
Chapter 15 Business Alliances: Joint Ventures, Partnerships, and Alliances Examination Questions and Answers 1. Business alliances may represent attractive alternatives to mergers and acquisitions. True or False 2. A joint venture is rarely an independent legal entity such as a […]
Economics Chapter 18 1 What were the two basic means of control by government as substitute for, or to supplements to, market forces in monopolized industries
Chapter 18 – Antitrust Policy and Regulation 18-1 CHAPTER 18 Antitrust Policy and Regulation A. Short-Answer, Essays, and Problems 1. What are the basic purposes of antitrust policy? 2. Briefly describe the historical background that gave rise to antitrust and […]
Banking Chapter 14 2 Why would the buyout firms want Qwest to continue to provide such services as billing and information technology support? How might such services be priced
16 3. Why might the RJR Nabisco board have accepted the KKR bid over the Johnson bid? Answer: The board may have accepted the KKR bid, because they did not believe that Johnson could finance his higher bid or simply […]
Economics Chapter 17 1 what will be the choice between more police protection and more fire protection? what will be the choice between more schools and more police protection
Chapter 17 – Asymmetric Information, Voting, and Public Choice 17-1 CHAPTER 17 Asymmetric Information, Voting, and Public Choice A. Short-Answer, Essays, and Problems 1. What are information problems affecting sellers? Give an example that illustrates how these types of problems […]
Banking Chapter 14 1 An LBO can be valued from the perspective of common equity investors only or all those who supply funds, including common and preferred investors and lenders
Chapter 14: HIGHLY LEVERAGED TRANSACTIONS: LBO Valuation and Modeling Basics Examination Questions and Answers 1. An LBO can be valued from the perspective of common equity investors only or all those who supply funds, including common and preferred investors and […]
Economics Chapter 16 2 The next four questions refer to the below supply and demand graph for a product on which the government imposes an excise tax
Chapter 16 – Public Finance: Expenditures and Taxes 347 18. Why are payroll taxes regressive? Payroll taxes refer to Social Security and Medicare taxes. In 2008, the Social Security tax rate was 6.2%, but that tax rate only applied to […]
Banking Chapter 13 1 Accounts receivable represent an undesirable form of collateral from the lender’s point of view because they are often illiquid
1 Chapter 13: FINANCING THE DEAL Private Equity, Hedge Funds, and Other Sources of Financing Examination Questions and Answers 1. Leveraged buyout firms use the unencumbered assets and operating cash flow of the target firm to finance the transaction. True […]
Economics Chapter 16 1 Given the following information on the tax paid for different levels of taxable income, fill in the average and the marginal tax rates for each income level
Chapter 16 – Public Finance: Expenditures and Taxes 16-1 CHAPTER 16 Public Finance: Expenditures and Taxes A. Short-Answer, Essays, and Problems 1. Briefly describe the role of government in the economy. How are these government activities financed? 2. The circular […]
Banking Chapter 13 2 In your opinion, was the buyout proposal presented by Ross Johnson’s management group in the best interests of the shareholders
16 The largest LBO in history is as well known for its theatrics as it is for its substantial improvement in shareholder value. In October 1988, H. Ross Johnson, then CEO of RJR Nabisco, proposed an MBO of the firm […]
Economics Chapter 15 1 Define total fertility rate and replacement rate. Use them to describe the population prospects for many developed countries
Chapter 15 – Natural Resource and Energy Economics 15-1 CHAPTER 15 Natural Resource and Energy Economics A. Short-Answer, Essays, and Problems 1. Describe the changes in population and living standards since 1800. What implications do these changes raise about standards […]
Banking Chapter 12 1 The sale of stock, rather than assets, is generally preferable to the target firm shareholders to avoid double taxation, if the target firm is structured as a limited liability company
Chapter 12: Structuring the Deal: Tax and Accounting Considerations Examination Questions and Answers 1. Taxes are an important consideration in almost any transaction, and they are often the primary motivation for an acquisition. True or False 2. From the viewpoint […]
Economics Chapter 14 1 if the productivity of the land decreases such that 200,000 less acres are demanded at each price, what will the economic rent be and how much land will be supplied
Chapter 14 – Rent, Interest, and Profit 14-1 CHAPTER 14 Rent, Interest, and Profit A. Short-Answer, Essays, and Problems 1. What determines the economic rent for land? Explain from a supply and demand perspective. 2. How does the supply of […]
Banking Chapter 11 1 Deal structuring is fundamentally about satisfying as many of the primary objectives of the parties involved and deciding how risk will be shared
Chapter 11: Structuring the Deal: Payment and Legal Considerations Examination Questions and Answers 1. Deal structuring is fundamentally about satisfying as many of the primary objectives of the parties involved and deciding how risk will be shared. True or False […]
Economics Chapter 13 2 What is the difference between an exclusive union and an inclusive union? What are the economic effects of each type
Chapter 13 – Wage Determination (+ Appendix) job. Given a stable demand for an occupation, the reduction in supply will tend to increase the equilibrium wage in the labor market. The typical reason that is given for licensing requirements is […]
Banking Chapter 11 2 What could Vornado have done to assuage EOP’s concerns about the certainty of the value of the stock portion of its offer
14 1. What was the form of payment employed by both bidders for Unocal? In your judgment, why were they different? Be specific. 2. How did Chevron use the form of payment as a potential takeover strategy? Answer: As explained […]
Economics Chapter 13 1 Why does the marginal resource cost exceed the wage rate in the case of a monopsonistic firm? Explain and illustrate with an example
Chapter 13 – Wage Determination (+ Appendix) 13-1 CHAPTER 13 Wage Determination (+ Appendix) A. Short-Answer, Essays, and Problems 1. When economists refer to labor, what type of workers are they referring to? 2. What do “wages” and “wage rates” […]
Banking Chapter 10 1 Revenue may be inflated by booking as revenue products shipped to resellers without adequately adjusting for probable returns
Chapter 10: Analysis and Valuation of Privately Held Companies Examination Questions and Answers 1. Both public and private firms always attempt to maximize earnings growth. True or False 2. Financial information for both public and private firms is equally reliable […]
Economics Chapter 12 2 What is the difference between a change in resource demand and a change in the quantity of a resource demanded
Chapter 12 – The Demand for Resources 20 _____ 10 _____ 1 _____ 12–14 Quantity of resource Y employed Marginal product of Y Total product Product price Total revenue Marginal revenue product of Y 0 – 0 – – 1 […]
Banking Chapter 9 2 Using the Merger Evaluation table given in the case, determine the estimated equity values of Tribune, Times Mirror and the combined firms
Times Mirror: A Largely Traditional Business Model As essentially a traditional newspaper, Times Mirror publishes five metropolitan and two suburban daily newspapers, a variety of magazines, and professional information such as flight maps for commercial airline pilots. The Los Angeles […]
Economics Chapter 12 1 The theory of resource pricing is sometimes referred to by economists as the theory of income distribution. Why
Chapter 12 – The Demand for Resources 12-1 CHAPTER 12 The Demand for Resources A. Short-Answer, Essays, and Problems 1. What are four significant reasons for studying resource pricing? 2. The theory of resource pricing is sometimes referred to by […]
Banking Chapter 9 1 Common size financial statements are useful for comparing businesses of different sizes in the same industry at different points in time
Chapter 9: Applying Financial Modeling To Value, Structure, and Negotiate Mergers and Acquisitions Examination Questions and Answers 1. The scrupulous application of GAAP ensures both consistency in comparing one firm’s financial performance with another and the accuracy of the data. […]
Economics Chapter 11 3 An industry with which of the following four-firm concentration ratios would tend to have the greatest amount of R&D
Chapter 11W – Technology, R&D, and Efficiency 85. The inverted-U theory shows the relationship between: A. Marginal utility and total utility B. Process and product innovation C. Average total costs and total product curves D. R&D expenditures and the concentration […]
Banking Chapter 8 1 The replacement cost approach to valuation of a target firm ignores value created by operating the assets in combination as a going concern
Economics Chapter 11 2 how much will the consumer buy and what will be the total utility from spending the given budget
Chapter 11W – Technology, R&D, and Efficiency The table below shows the marginal utility schedules for old product X and new product Y for a hypothetical consumer. The price of X is $2 and the price of good Y is […]
Human Resources Chapter 19 1 The public relations function is a boundary-spanning role that primarily involves the flow of information to and from the organization
Chapter 19 – Managing Public Relations 1. (p. 432) How the general public perceives a business firm can have a major effect on its performance. TRUE 2. (p. 434) An effective public relations program is not fundamental to an organization’s […]
Banking Chapter 7 1 In calculating the weighted average cost of capital, the weights should be estimated using the market value of the target firm’s debt and equity
Chapter 7: Merger and Acquisition Cash Flow Valuation Basics Examination Questions and Answers True and False Questions: Answer true or false to the following questions: (Circle True or False) 1. In calculating the weighted average cost of capital, the weights […]
Economics Chapter 11 1 In analyzing a market, the time horizon where technology can change and firms can offer new products is referred to as the
Chapter 11W – Technology, R&D, and Efficiency 1. Which term would be most closely associated with the idea of “new and better goods and services and new and better ways of producing and distributing them”? A. Invention B. Product innovation […]
Human Resources Chapter 18 1 Community relations departments work primarily on the national level to link the corporation to community stakeholders
Chapter 18 – The Community and the Corporation 1. (p. 412) The term community refers to a company’s area of local business influence. TRUE 2. (p. 412) The term community is sometimes improperly used to refer to a range of […]
Banking Chapter 6 1 Rapid integration helps to realize the planned synergies and may contribute to a higher present value for the merger or acquisition
Chapter 6 Integration: Mergers, Acquisitions, and Business Alliances Examination Questions and Answers 1. The integration process if done effectively can help to mitigate the potential loss of employees. True or False 2. Integration is among the most important factors contributing […]
Economics Chapter 11 3 Which pair of market structures provides firms with the greatest ability to finance R&D out of retained earnings
Chapter 11W – Technology, R&D, and Efficiency 11W–32 87. Which pair of market structures provides firms with the greatest ability to finance R&D out of retained earnings? AACSB: Reflective Thinking Bloom’s: Level 2 Understand Difficulty: 2 Medium Learning Objective: 11W-05 […]
Human Resources Chapter 17 1 The term pay gap refers to the inequitable concentration of a group, such as minorities or women, in a particular job category
Chapter 17 – Managing a Diverse Workforce 1. (p. 386) The term diversity refers to variation in the important human characteristics that distinguish people from one another. TRUE 2. (p. 386) Workforce diversity represents both a challenge and an opportunity […]
Banking Chapter 6 2 Why might it take so long to integrate manufacturing operations and certain functions such as purchasing
monitoring of transactions. By setting priorities early in the process and employing small, project-focused teams, Coty was able to integrate successfully the complex supply chains of the firms in a timely manner. Discussion Questions 1. Do you agree with Coty […]
Economics Chapter 11 2 Suppose that a firm introduces a highly profitable new product. If this new product is priced higher than existing substitute products
Chapter 11W – Technology, R&D, and Efficiency 57. Refer to the above data. Suppose the price of new product Z is $10 rather than $1. This consumer would purchase: A. some of Z but not as much as if the […]
Human Resources Chapter 16 1 Some labor unions have departed from their traditional adversarial approach to work cooperatively with employers for their mutual benefit
Chapter 16 – Employees and the Corporation 1. (p. 364) The employment relationship confers rights and duties on both sides. TRUE 2. (p. 364) Employees in the United States have the right to organize and bargain collectively. TRUE 3. (p. […]
Banking Chapter 5 2 What alternatives to acquisition could Mattel have considered? Discuss the pros and cons of each alternative?
13 Opportunities and Threats Opportunities New Distribution Channels. Mattel.com represents 80 separate toy and software offerings. Mattel hopes to spin this operation off as a separate company when it becomes profitable. Mattel.com lost about $70 million in 1999. The other […]
Economics Chapter 11 1 As pizza topped with barbecue chicken became popular at specialty restaurants, Pizza Hut introduced a similar pizza
Chapter 11W – Technology, R&D, and Efficiency 1. Broadly defined, technological advance: A. can occur in the short run, long run, or very long run. B. comprises new and improved goods and services and new and improved ways of producing […]
Human Resources Chapter 15 1 As business firms grow in size and market power, they have increasingly lost the ability to dominate marketplace transactions with their customers.
Chapter 15 – Consumer Protection 1. (p. 342) The Latin phrase, caveat emptor, meaning “let the seller beware” has put sellers on alert to look after their own interests. FALSE 2. (p. 342) Consumer advocacy groups in the United States […]
Banking Chapter 5 1 The number of selection criteria should be as extensive as possible to ensure that all factors relevant to the firm’s decision-making process are considered
Chapter 5 Implementation: Search through Closing—Phases 3 to 10 Examination Questions and Answers 1. The first step in establishing a search plan for potential acquisition or merger targets is to identify the primary screening or selection criteria. True or False […]
Economics Chapter 11 2 Explain how monopolistically competitive producers try to improve on the condition of just breaking even in the long run
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 20. Draw a graph of the cost curves for a monopolistically competitive firm that clearly illustrates the excess capacity that arises in the long run. Explain why this excess capacity arises. […]
Human Resources Chapter 14 1 The three types of stockholders that own shares of stock in U.S. corporations are individuals, institutions, and government
Chapter 14 – Stockholder Rights and Corporate Governance 1. (p. 317 – 318) The three types of stockholders that own shares of stock in U.S. corporations are individuals, institutions, and government. FALSE 2. (p. 318) Since the 1960s, there has […]
Banking Chapter 4 1 An analysis of markets should involve current and potential customers, as well as current and potential competitors, but it should exclude supplier
Chapter 4 Planning: Developing Business and Acquisition Plans—Phases 1 & 2 of the Acquisition Process Examination Questions and Answer 1. A planning-based acquisition process consists of both a business plan and acquisition plan, which drive all subsequent phases of the […]
Economics Chapter 11 1 How does economic rivalry take place in monopolistic competition? Describe the different aspects of product differentiation and price competition
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 11-1 CHAPTER 11 Monopolistic Competition and Oligopoly (+ Appendix) A. Short-Answer, Essays, and Problems 1. What are the major features of monopolistic competition compared to pure competition and pure monopoly? 2. […]
Human Resources Chapter 13 1 Many businesses have developed a privacy policy, which explains what use of the company’s technology is permissible.
Chapter 13 – Managing Technology and Innovation 1. (p. 293) Many businesses have developed a privacy policy, which explains what use of the company’s technology is permissible. TRUE 2. (p. 293) Most Americans mistakenly believe that if a Web site […]
Economics Chapter 11 1 Below are two average total cost schedules for a firm. The first schedule (ATC1) shows the cost of producing the product at five levels of output before a new innovation
Chapter 11 Web – Technology, R&D, and Efficiency 11W-1 CHAPTER 11 Web Technology, R&D, and Efficiency Note: This bonus web chapter is available at the textbook Web site: www.mcconnell19e.com. A. Short-Answer, Essays, and Problems 1. Give a definition of technological […]
Human Resources Chapter 12 1 Nations have tended to move sequentially through each phase of technology, beginning with the lowest technology and moving higher with each step
Chapter 12 – Technology, Organizations, and Society 1. (p. 268) Technology is an unmistakable ethical force, but not an economic or social force, in the world where we live. FALSE 2. (p. 269) Future shock means change will happen too […]
Banking Chapter 3 2 Do you believe that the potential severance payments that could be paid to Capellas were excessive? Explain your answer
being acquired by Qwest. Verizon also bought out the largest hostile MCI shareholder, Carlos Slim Helu. Moreover, Verizon made the special dividend to MCI shareholders payable upon approval rather than at closing as an additional inducement to gain MCI shareholder […]
Economics Chapter 10 1 The initial values for expected returns, R&D and interest-rate cost for an energy company’s investment in developing alternative fuels are listed in the table below.
Chapter 10 – Pure Monopoly 10-1 CHAPTER 10 Pure Monopoly A. Short-Answer, Essays, and Problems 1. What are the major characteristics of pure monopoly? 2. What are the major barriers to entry that explain the existence of monopoly? 3. What […]