Independent business units are a common choice for corporate ventures, but what is a significant drawback? A. Isolation of risk to the corporation B. Require less direct monitoring OC. Allow venture to focus D. Sharing resources and personnel
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- Which one of the following is the least likely reason a company may acquire an ownership interest in another company? Select one: a.To benefit form an overvaluing of assets in the investee company b. To oust an inefficient management team c. To take advantage of operating and/or cost synergies d. To exercise an active role in the business' activitiesmultinational enterprises are supported by strong and effective institutions to succeed in business. certainity of a business environmebt determines a firms succes. examine how the various types of institutions that reducea firms uncertainint.Real options reflect the management's ability to adopt and later revise corporate investment decisions. Select one: True False Any strategic transaction can unlock additional values for both parties involved in the transaction, these additional benefits can't be accessed by each party separately. Select one: True False Book values do not mirror actual market values for manufacturing companies, but they may be more accurate for distribution firms. Select one: True False When a company invites other companies to acquire its business, its considered as a friendly acquisition.
- The stakeholder capitalism model: typically avoids the flaw of impatient capital. tries to meet the desires of multiple stakeholders. may leave management without a clear signal about tradeoffs among the several stakeholders. all of the aboveA well-run company should align the management’s interest and with the owner’s interests. What are some actions that stockholders can take to ensure that management’s and stockholders’ interests are aligned? Is this important? What are some of the risks/consequences if the management’s interests are not aligned with the owners?Suppose you need additional capital to expand,and you sell some stock to outside investors. If youmaintain enough stock to control the company,what type of agency conflict might occur?
- Advantages of the corporate form of business, over other forms, include all of the following except: O Lower costs of separation of owners from managers, or so-called "agency costs." O Greater ease of raising capital. O Limited liability of the shareholders for corporate misdeeds. O Greater liquidity of ownership interests. O Greater ability to hire talented management.Discuss why it is difficult for established companies to innovate in their business models? What approach would allow incumbents to overturn the conventions of their industries before others do?What are some of the conflicts that can arise when a company is owned by group of shareholders but managed by a different group of people? How could you reduce the significance of these conflicts?
- Which of the following statements is CORRECT? Select one: a. Conflict of interest between shareholders and managers is not possible. b. By definition, the agency problem can only take place in corporations but not in proprietorships and partnerships. c. Conflict of interest between shareholders and bondholders is not possible. d. Managers always work to maximize the long-run value, and therefore the price, of their company stocks. This is exactly what shareholders desire.Which of the following is not an example of a mitigating factor that reduces the risk that the going concern assumption may be in doubt? a. The ability to raise additional funds via borrowings b. A letter of guarantee from a parent company c. The ability to sell an unprofitable segment of the business d. Significant rapid increase in competitionWhich of the following statements is correct? Group of answer choices Corporations and partnerships have an advantage over proprietorships because a sole proprietor is subject to unlimited liability, but investors in the other types of businesses are not. Firms in highly competitive industries find it easier to exercise "social responsibility" than do firms in oligopolistic industries. A good goal for a corporate manager is maximization of expected EPS. A good example of an agency relationship is the one between stockholders and managers. Most business in the U.S. is conducted by corporations; corporations' popularity results primarily from their favorable tax treatment.