at one time placed restrictions on foreign ownership of its stock. When it relaxed these restrictions, there was a
major transfer of wealth from foreign shareholders to domestic shareholders.
none of the options
References
Multiple Choice Difficulty: 1 Easy
20.
Award: 1.00 point
21.
Award: 1.00 point
22.
Award: 1.00 point
The goal of shareholder wealth maximization
is not appropriate for non-U.S. business firms.
means that all business decisions and investments that a firm makes are done for the purpose of making the
owners of the firm better off financially.
is a sub-objective the firm should attempt to achieve after the objective of customer satisfaction is met.
is in conflict with the privatization process taking place in third-world countries.
References
Multiple Choice Difficulty: 1 Easy
As capital markets are becoming more integrated, the goal of shareholder wealth maximization
has been altered to include other goals as well.
has lost out to other goals, even in the U.S.
has been given increasing importance by managers in Europe.
has been shown to be a deterrent to raising funds abroad.
References
Multiple Choice Difficulty: 1 Easy
Corporate scandals at firms such as Enron, WorldCom and the Italian firm Parmalat
show that managers might be tempted to pursue their own private interests at the expense of shareholders.
show that Italian shareholders are better at monitoring managerial behavior than U.S. shareholders.
show that white-collar criminals hardly ever get punished.
show that socialism is a better way to go than capitalism.
References
Multiple Choice Difficulty: 1 Easy
23.
Award: 1.00 point
24.
Award: 1.00 point
25.
Award: 1.00 point
While the corporate governance problem is not confined to the United States,
it can actually be a much more serious problem in other parts of the world, where the legal protection of
shareholders is weak or nonexistent.
it has reached its high point in the United States.
the U.S. legal system, with lawsuits used only as a last resort, ensured that any conflicts of interest would soon
be a thing of the past.
none of the options
References
Multiple Choice Difficulty: 1 Easy
The owners of a business are the
taxpayers.
workers.
suppliers.
shareholders.
References
Multiple Choice Difficulty: 1 Easy
The massive privatization that is currently taking place in developing and formerly socialist countries
will eventually enhance the standard of living to these countries' citizens.
depends on private investment.
increases the opportunity set facing these countries' citizens.
all of the options
References
Multiple Choice Difficulty: 1 Easy
26.
Award: 1.00 point
27.
Award: 1.00 point
28.
Award: 1.00 point
A firm with concentrated ownership
may give rise to conflicts of interest between dominant shareholders and small outside shareholders.
may enjoy more accounting transparency than firms with diffuse ownership structures.
is a partnership, never a corporation.
none of the options
References
Multiple Choice Difficulty: 1 Easy
The ultimate guardians of shareholder interest in a corporation are the
rank and file workers.
senior management.
boards of directors.
all of the options
References
Multiple Choice Difficulty: 1 Easy
In countries like France and Germany,
managers have often made business decisions with regard to maximizing market share to the exclusion of other
goals.
managers have often viewed shareholders as one of the "stakeholders" of the firm, others being employees,
customers, suppliers, banks and so forth.
managers have often regarded the prosperity and growth of their combines, or families of related firms, as their
most critical goal.
managers have traditionally embraced the maximization of shareholder wealth as the only worthy goal.
References
Multiple Choice Difficulty: 1 Easy
29.
Award: 1.00 point
30.
Award: 1.00 point
31.
Award: 1.00 point
When corporate governance breaks down
shareholders are unlikely to receive fair returns on their investments.