International Financial Management 13th Edition By Jeff Madura – Test Bank
Chapter 01: Multinational Financial Management: An Overview
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1. The commonly accepted goal of an MNC is to: a. maximize short-term earnings. b. maximize shareholder wealth. c. minimize risk. d. A and C. e. maximize international sales. ANSWER: b DIFFICULTY: Easy LEARNING OBJECTIVES: INFM.MADU.15.01.01 NATIONAL STANDARDS: United States – BUSPROG.INFM .MADU.15.03 STATE STANDARDS: United States – OH – DISC.INFM.MADU.15.02 KEYWORDS: Bloom’s: Knowledge |
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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 ANSWER: b DIFFICULTY: Easy LEARNING OBJECTIVES: INFM.MADU.15.01.01 NATIONAL STANDARDS: United States – BUSPROG.INFM .MADU.15.03 STATE STANDARDS: United States – OH – DISC.INFM.MADU.15.02 KEYWORDS: Bloom’s: Knowledge |
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3. For an MNC, agency costs are typically: a. nonexistent 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. ANSWER: b DIFFICULTY: Easy LEARNING OBJECTIVES: INFM.MADU.15.01.01 NATIONAL STANDARDS: United States – BUSPROG.INFM .MADU.15.03 STATE STANDARDS: United States – OH – DISC.INFM.MADU.15.02 KEYWORDS: Bloom’s: Knowledge |
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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. ANSWER: d DIFFICULTY: Moderate LEARNING OBJECTIVES: INFM.MADU.15.01.01 NATIONAL STANDARDS: United States – BUSPROG.INFM .MADU.15.03 STATE STANDARDS: United States – OH – DISC.INFM.MADU.15.02 KEYWORDS: Bloom’s: Comprehension |
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5. The valuation of an MNC should rise when an event causes the expected cash flows from foreign subsidiaries to ____ and when the foreign currencies denominating these cash flows are expected a. decrease; appreciate b. increase; appreciate c. decrease; depreciate d. increase; depreciate ANSWER: b DIFFICULTY: Easy LEARNING OBJECTIVES: INFM.MADU.15.01.04 NATIONAL STANDARDS: United States – BUSPROG.INFM .MADU.15.03 STATE STANDARDS: United States – OH – DISC.INFM.MADU.15.02 KEYWORDS: Bloom’s: Comprehension |
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