Multiple Questions

QUESTION 1

1. Which of the following are an example of an external stakeholder in a company?a.Stockholdersb.Managersc.Employeesd.Customerse.Board members

1 points   

QUESTION 2

1. Which of the following types of business law describes the accepted principles of right and wrong when dealing with competitive behavior?a.Securities lawb.Contract lawsc.Tort lawsd.Antitrust lawse.Intellectual property law

1 points   

QUESTION 3

1. Which of the following is NOT a responsibility of the board of directors?a.Monitor corporate strategy decisions and ensure that they are consistent with stockholder interestsb.Apply sanctions on management when appropriatec.Make sure the audited financial statements present a true picture of the company’s financial situationd.Develop targets for divisional managerse.Hire, fire, and compensate the CEO

1 points   

QUESTION 4

1. A stock option is a right to purchase:a.shares of the company’s stock at the stock’s current price.b.shares of the company’s stock at half the stock’s current price.c.shares of the company’s stock at a predetermined price at some point in the future.d.bonds issued by the company.e.stock in an underperforming company.

1 points   

QUESTION 5

1. Arnold is a CEO at Gamma LLC. He has control over the corporate funds of the company. Arnold has often used funds from the company to pay for his travel and hotel expenses. The funds could otherwise have increased stockholder returns. Which of the following concepts is illustrated in this scenario? a.Corporate governanceb.Information manipulationc.Greenmaild.On-the-job consumptione.Information asymmetry

1 points   

QUESTION 6

1. Which of the following is a source of gaining wealth whereby corporate raiders either push companies to change their corporate strategy to one that will benefit stockholders, or charge a premium for stock when the company wants to buy it back?a.Self-dealingb.Risk capitalc.Greenmaild.A stock optione.On-the-job consumption

1 points   

QUESTION 7

1. Which of the following statements is true in the context of stock-based compensation?a.Granting more stock options often results in an increase in stockholder equity.b.A cause for concern is that stock options are often granted at extremely high strike prices.c.Critics deny that stock-based compensations motivate managers to improve company performance. d.Stock-based compensation schemes for executives can align management and stockholder interests.e.Stock options usually result in information asymmetry.

1 points   

QUESTION 8

1. Alpha LLC is a large paint manufacturing company. Despite government regulations, the company has been illegally disposing of its chemical wastes in a lake, which is an important habitat for several fish and birds. Which of the following ethical concerns is illustrated in this scenario?a.Environmental degradationb.On-the-job consumption c.Opportunistic exploitationd.Self-dealinge.Substandard working conditions

1 points   

QUESTION 9

1. Which of the following statements is true about strategic control systems?a.They are usually set by government regulators and require top management to follow them.b.Their primary purpose is to foster on-the-job consumption.c.They relieve employees and management of legal and ethical constraints.d.Their purpose is to ensure that the wealth of stockholders is maximized.e.They are designed to encourage information asymmetry.

1 points   

QUESTION 10

1. Which of the following statements is true about takeover constraint?a.It encourages managers to put their own interests above those of stockholders.b.It usually occurs when the management has maximized the wealth of the stockholders.c.It often gives senior managers more independence when it comes to granting stock options.d.It has ceased to exist in companies since the late 1990s.e.It is the governance mechanism of last resort and is often invoked only when other governance mechanisms have failed.

1 points   

QUESTION 11

1. When managers of a firm seek to unilaterally rewrite the terms of contracts with suppliers, buyers, or complement providers in a way that is more favorable to their firm, they are engaging in:a.self-dealing.b.greenmail.c.opportunistic exploitation.d.downsizing.e.information manipulation.

1 points   

QUESTION 12

1. Gemini Corp. is a large automobile manufacturer that has contracts with several suppliers. To gain more benefits from an upholstery supplier, Gemini Corp. unilaterally changed the contract and pressurized the supplier to lower its prices. Which of the following concepts is illustrated in this scenario?a.Self-dealingb.Agency strategyc.On-the-job consumptiond.Opportunistic exploitatione.Greenmail

1 points   

QUESTION 13

1. Which of the following statements is true in the context of financial statements and auditors?a.The information contained in the financial statements can enable a stockholder to calculate the ROIC of a company in which he or she invests.b.Sarbanes-Oxley Act in 2002 barred CEOs and CFOs from endorsing their company’s financial statements.c.The SEC requires that the accounts be audited by a committee formed by the board members and senior employees of the company.d.Publicly traded companies in the United States are not required to file quarterly or annual reports with the SEC.e.So far, there have been no cases in which auditors were found cooperating with companies to misrepresent financial information.

1 points   

QUESTION 14

1. Which of the following statements about the board of directors is NOT true?a.The board can be held legally accountable for a company’s actions.b.The board has the legal authority to hire, fire, and compensate the CEO.c.All the directors are full-time employees of the company.d.Outside directors help perform the monitoring function of the board.e.Board members are elected by stockholders.

1 points   

QUESTION 15

1. To stimulate reduction in its production costs, Delta LLC has moved its manufacturing facilities to an underdeveloped country where there are few labor laws. The employees at the manufacturing facilities are children and teenagers, and they receive minimal wages. Which of the following ethical issues is illustrated in this scenario? a.On-the-job consumptionb.Opportunistic exploitationc.Self-dealingd.Information manipulatione.Substandard working conditions