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What best describes transferability of investor ownership in a public stock company?


A) Investors can give out company stocks as a gift.
B) Investors are allowed to trade shares of stocks.
C) Investors are allowed to participate in strategy formulation.
D) Investors can be hired as employees.

E) C) and D)
F) B) and D)

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Ramadin is the CEO of Brownback Consulting Inc.Ramadin's efforts to persuade the board of directors to pursue a new business strategy fail.He borrows money from different sources and purchases all the outstanding shares of Brownback Consulting.What does this scenario best exemplify?


A) Buy back
B) Merger
C) Leveraged buyout
D) Initial public offering

E) B) and D)
F) A) and B)

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Which of the following is regarded as the most internal of control mechanisms?


A) Business ethics
B) Executive compensation
C) The market for corporate control
D) Government regulation

E) None of the above
F) All of the above

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Ethics is:


A) not synonymous with law.
B) impossible to codify into law.
C) always universal and cannot differ between cultures.
D) the minimum acceptable standard in business practice.

E) All of the above
F) A) and B)

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The MBA oath first developed at Harvard and now signed by students at over 300 business schools is modeled after _____.


A) Level-5 leadership
B) the Sarbanes-Oxley pledge
C) the Hippocratic oath in medicine
D) Goldman Sach's code

E) A) and B)
F) A) and C)

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Saul is a manager at Holden Apparels Inc.and is friends with the company's CEO.This privilege gives Saul the information that Holden Apparels is in the midst of talks to take over a leading rival.Saul buys stocks of Holden with the expectation that its stocks will appreciate.But the deal falls through and the stocks of Holden depreciate in the following months.Are Saul's actions unethical? Why?


A) Yes, because it is unethical to trade stocks based on insider information irrespective of the final outcome.
B) Yes, because it is illegal and unethical for Saul to possess any kind of insider information.
C) No, because Saul did not ask the CEO to disclose such information to him.
D) No, because Saul did not make any profits from trading stocks using this information.

E) None of the above
F) B) and D)

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What is the connection between Rajat Gupta and insider trading?

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Rajat Gupta, a former McKinsey chief exe...

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Which of the following functions did HP's board of directors fail at following the unexpected departure of Mark Hurd?


A) Providing guidance to the CEO in the selection and compensation of other executives
B) Evaluating and compensating the CEO
C) Overseeing the company's CEO succession plan
D) Appointing a new CEO

E) A) and C)
F) A) and D)

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Why does Michael Porter recommend expanding the customer base of an organization in terms of the Shared Value creation framework?


A) Doing so could yield significant business opportunities that could improve the standard of living of the poor.
B) Doing so is the best way to ensure that shareholders have the most legitimate claim on profits made by the organization.
C) Doing so could be the only way to meet stockholder expectations in a highly competitive market.
D) Doing so will help to prevent the inclusion of more nontraditional partners into internal firm value chains.

E) A) and B)
F) A) and C)

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Which of the following is an implication for the strategist in the context of corporate governance and a company's success?


A) Very few and specific corporate governance mechanisms can be effective in addressing the principal-agent problem.
B) Effective corporate governance and solid business ethics are critical to gaining and sustaining competitive advantage.
C) Leading by ethical example often has a less strong effect on employee behavior than words.
D) A firm that restricts its responsiveness to stockholders (and no other stakeholders) and keeps them committed to its vision will be successful.

E) B) and C)
F) A) and B)

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Which of the following is NOT true of corporate governance in public stock companies?


A) Corporate governance seeks to benefit multiple stakeholders, not just shareholders.
B) Corporate governance provides rules for making decisions on corporate affairs.
C) Corporate governance attempts to address the principal-agent problem.
D) Corporate governance seeks to create a separation between ownership and control.

E) A) and B)
F) A) and C)

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Which of the following statements best supports the view that GE's ecomagination strategy is in line with the Shared Value creation framework?


A) The ecomagination strategy is the brainchild of the founder of the company.
B) The ecomagination strategy helps GE spend more on research and development than other similar companies.
C) The ecomagination strategy generated $3 billion in revenues for GE during 2012.
D) The ecomagination strategy allows GE to produce "green" products while increasing revenue and competitive advantage.

E) All of the above
F) B) and C)

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Which of the following scenarios best exemplifies a leveraged buyout of a telecommunications firm, Telbok Inc.?


A) The owner of another company buys all the outstanding shares of Telbok.
B) A private equity firm, Rainbow Inc., buys a large amount of shares of Telbok.
C) Telbok sells all its shares and declares bankruptcy.
D) Telbok buys back a large amount of its own shares from the stock market.

E) B) and C)
F) C) and D)

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All public companies listed on the U.S.stock exchanges must file a number of financial statements with the _____.


A) GovernanceMetrics International (GMI)
B) Securities and Exchange Commission (SEC)
C) EDGAR database
D) Wall Street Journal

E) A) and B)
F) A) and C)

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At Opnic Corp., a cross-functional team is formed to work on a project for a new client.The team consists of Darius and four other members.At most of the team's presentations to senior management, Darius takes the lead and discusses project specifics with the management, while others chip in with additional information.At the completion of the project, Darius is recommended for promotion, while the other team members receive little recognition for their hard work.The reality is that Darius did very little actual work but spent some time compiling the project report based on different documents submitted by the others.This scenario at Opnic Corp.is a typical consequence of _____.


A) moral hazard
B) adverse selection
C) shared value creation
D) corporate governance

E) None of the above
F) All of the above

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Poison pills have become rare because:


A) leveraged buyouts can effectively skirt the measures put in place by poison pills.
B) the market for corporate control is dead.
C) federal laws prevent hostile takeovers.
D) they retard an effective function of equity markets.

E) A) and B)
F) A) and C)

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If the board of directors at GE decides to pursue a stakeholder strategy, should they change the ecomagination strategy?


A) Yes, they should change the strategy because it provides benefits to the society.
B) No, they should not change the strategy because the strategy already helps them save costs while generating huge revenues.
C) No, they should not change the strategy because the change would necessitate making tough ethical decisions.
D) Yes, they should change the strategy because creating value for society is against the principles of stakeholder strategy.

E) B) and C)
F) A) and D)

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How can top management foster ethical behavior in employees?

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To foster ethical behavior in employees,...

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What usually happens if a hostile takeover attempt is successful?

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If a hostile takeover attempt is success...

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Which of the following is true of business ethics?


A) Certain notions such as fairness, honesty, and reciprocity are universal norms.
B) Business ethics is an agreed-upon code of conduct in business, based on laws.
C) The perception of what is ethical and what is not is similar across different cultures.
D) Business ethics needs to be codified into law in order to be followed.

E) A) and B)
F) B) and C)

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