BUSI 536 Quiz Corporate Governance

BUSI 536 Quiz: Corporate Governance, Joint Ventures, Strategic Alliances, Valuation

1. Research, such as research by David Yermack, has found which of the following with respect to larger board size:
2. The European Union has enacted its own version of the Sarbanes-Oxley Act. It is called:
3. Malmendier and Tate analyzed the performance of CEOs who were awarded “superstar CEOs” status in the form of relatively high compensation, awards, and press coverage. They found:
4. Research, such as the study by Fich and Shivdasani, has shown that companies that have over half of the outside directors sitting on three or more boards have which of the following?
5. With respect to companies with golden parachute agreements, Machlin, Choe, and Miles found:
6. Lambert and Larker found that the trigger control percentage for activation of golden parachutes agreements was when a bidder acquired approximately 51% of the company outstanding stock.
7. Core, Holthausen, and Larker’s research found that CEO compensation was greater for the directors who were gray, over age 69, or who served on three or more boards.
8. Cooper, Gulen, and Rau found that [rms in the highest decile ranking of executive compensation earned significant negative excess returns.
9. Malmendier and Tate analyzed the role of CEO overconfidence in the tendency for CEOs to engage in M&As. They measured CEO overconfidence using factors such as the tendency for CEOs to hold options in their company’s stock until their expiration.
10. A study by Hartzell, Ofek, and Yermack showed that in deals where target CEOs enjoyed extraordinary personal treatment and benefits, such as high compensation or other special bene[ts, shareholders received lower acquisition premiums.
11. One of the reasons why companies enter strategic alliances is to:
12. Koh and Venkatraman found:
13. The following factors should govern the allocation of control rights in joint ventures except for:
14. Research shows joint ventures have all but the following:
15. Which tends to have the lowest commitment level?
16. Strategic alliances are common in the pharmaceutical industry.
17. Chan, Kensinger, Keown, and Martin found positive abnormal returns from strategic alliances.
18. Johnson and Houston found that joint ventures were a favored alternative over contractual agreements when transaction costs were low.
19. Das, Sen, and Sengupta showed that technological alliances were associated with greater announcement returns than marketing alliances.
20. Vertical mergers in the United States are not subject to review by the Justice Department.
21. Research by Kaplan and Ruback found that:
22. Which of the following is true:
23. A study by Varaiya showed the following about takeover premiums:
24. Which of the following factors will influence the initial potential dilution of earnings per share?
25. The discount rate used to discount future cash flows should:
26. In bear markets, control premiums (relative to current market prices) may rise.
27. Business valuation is as much of an art as it is a science.
28. For many years the concentrated holdings by large block holders made hostile takeovers in Europe more difficult to complete.
29. Moeller, Schlingemann, and Stulz’s research shows that during the period 1998–2001, acquiring [rm shareholders gained a total of $240 billion!
30. In Rau and Vermaelen’s research, glamour [rms have high book to market value ratios.
31. Research by Auerbach and Poterba and by Altshuler and Auerbach on tax loss carry forwards indicate that the following tax-related factor may offset the otherwise full value of the target’s losses:
32. Research by Hayn on the role that the tax attributes of transactions played in determining abnormal returns for targets and acquirers found:
33. In a Type B reorganization in the United States, at least what percent of the payment to the target must be stock in the acquiring company:
34. Research by Auerbach and Reishus found that:
35. In the United States, goodwill is amortized over a period not exceeding:
36. In the United States and under the purchase method, the acquiring company is entitled to income of the acquired company only from the date of purchase.
37. Research seeking to find the existence of asset basis step-up as a motivating factor for mergers and acquisitions before the Tax Reform Act of 1986, such as research by Auerbach and Reishus, confirmed that asset basis step-up was a significant motivating factor.
38. The United States just lowered its corporate tax rates and this should greatly reduce, if not eliminate, the demand for tax-based corporate inversion?
39. There are different types of Type D reorganizations and one type covers acquisitions while another type covers breakups such as spinoffs.
40. In the United States, a transaction may be partially taxable if the consideration is a combination of stock and cash.