Test Bank For International Financial Management 12th Edition by Jeff Madura
Chapter 1—Multinational Financial Management: An Overview
1. The commonly accepted goal of the MNC is to:
|
a. |
maximize short-term earnings. |
|
b. |
maximize shareholder wealth. |
|
c. |
minimize risk. |
|
d. |
A and C. |
|
e. |
maximize international sales. |
ANS: B PTS: 1 DIF: Easy OBJ: INFM.MADU.15.01.01
NAT: BUSPROG.INFM.MADU.15.03 STAR: DISC.INFM.MADU.15.02
KEY: Bloom’s: Knowledge
2. With regard to corporate goals, an MNC is mostly concerned with maximizing ____, and a purely domestic firm is mostly concerned with maximizing ____.
|
a. |
shareholder wealth; short-term earnings |
|
b. |
shareholder wealth; shareholder wealth |
|
c. |
short-term earnings; sales volume |
|
d. |
short-term earnings; shareholder wealth |
ANS: B PTS: 1 DIF: Easy OBJ: INFM.MADU.15.01.01
NAT: BUSPROG.INFM.MADU.15.03 STAR: DISC.INFM.MADU.15.02
KEY: Bloom’s: Knowledge
3. For the MNC, agency costs are typical:
|
a. |
non-existent. |
|
b. |
larger than agency costs of a small purely domestic firm. |
|
c. |
smaller than agency costs of a small purely domestic firm. |
|
d. |
the same as agency costs of a small purely domestic firm. |
ANS: B PTS: 1 DIF: Easy OBJ: INFM.MADU.15.01.01
NAT: BUSPROG.INFM.MADU.15.03 STAR: DISC.INFM.MADU.15.02
KEY: Bloom’s: Knowledge
4. Which of the following could reduce agency problems for an MNC?
|
a. |
stock options as managerial compensation. |
|
b. |
hostile takeover threat. |
|
c. |
investor monitoring. |
|
d. |
all of the above are forms of corporate control that could reduce agency problems for an MNC. |
ANS: D PTS: 1 DIF: Moderate OBJ: INFM.MADU.15.01.01
NAT: BUSPROG.INFM.MADU.15.03 STAR: DISC.INFM.MADU.15.02
KEY: Bloom’s: Comprehension
5. The valuation of an MNC should rise when an event causes the expected cash flows from foreign to ____ and when foreign currencies denominating these cash flows are expected to ____.
|
a. |
decrease; appreciate |
|
b. |
increase; appreciate |
|
c. |
decrease; depreciate |
|
d. |
increase; depreciate |
ANS: B PTS: 1 DIF: Easy OBJ: INFM.MADU.15.01.04
NAT: BUSPROG.INFM .MADU.15.03 STA: DISC.INFM.MADU.15.02
Reviews
There are no reviews yet.