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Intermediate Financial Management 12th Edition Brigham Test Bank Instant Download All Chapter
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CHAPTER 10—CORPORATE GOVERNANCE
1. Two important issues in corporate governance are (1) the rules that cover the board's ability to fire the CEO and (2) the
rules that cover the CEO's ability to remove members of the board.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Easy
LEARNING OBJECTIVES: INTE.GENE.16.67 - LO: 10-2
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - AK - DISC: Financial statements, anal - DISC: Financial statements, analysis,
forecasting, and cash flows
LOCAL STANDARDS: United States - OH - Default City - TBA
TOPICS: Corporate governance
KEYWORDS: Bloom’s: Knowledge
3. The CEO of D'Amico Motors has been granted some stock options that have provisions similar to most other executive
stock options. If D'Amico's stock underperforms the market, these options will necessarily be worthless.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty: Moderate
LEARNING OBJECTIVES: INTE.GENE.16.67 - LO: 10-2
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - AK - DISC: Financial statements, anal - DISC: Financial statements, analysis,
forecasting, and cash flows
LOCAL STANDARDS: United States - OH - Default City - TBA
TOPICS: Stock options
KEYWORDS: Bloom’s: Comprehension
4. ESOPs were originally designed to help improve worker productivity, but today they are also used to help prevent
Cengage Learning Testing, Powered by Cognero Page 1
CHAPTER 10—CORPORATE GOVERNANCE
hostile takeovers.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty: Moderate
LEARNING OBJECTIVES: INTE.GENE.16.68 - LO: 10-3
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - AK - DISC: Financial statements, anal - DISC: Financial statements, analysis,
forecasting, and cash flows
LOCAL STANDARDS: United States - OH - Default City - TBA
TOPICS: ESOP
KEYWORDS: Bloom’s: Comprehension
5. Which of the following is NOT normally regarded as being a barrier to hostile takeovers?
a. Targeted share repurchases.
b. Shareholder rights provisions.
c. Restricted voting rights.
d. Poison pills.
e. Abnormally high executive compensation.
ANSWER: e
POINTS: 1
DIFFICULTY: Difficulty: Moderate
LEARNING OBJECTIVES: INTE.GENE.16.67 - LO: 10-2
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - AK - DISC: Financial statements, anal - DISC: Financial statements, analysis,
forecasting, and cash flows
LOCAL STANDARDS: United States - OH - Default City - TBA
TOPICS: Corporate governance
KEYWORDS: Bloom’s: Analysis
OTHER: TYPE: Multiple Choice: Conceptual
6. Which of the following is NOT normally regarded as being a good reason to establish an ESOP?
a. To enable the firm to borrow at a below-market interest rate.
b. To make it easier to grant stock options to employees.
c. To help prevent a hostile takeover.
d. To help retain valued employees.
e. To increase worker productivity.
ANSWER: b
RATIONALE: Statement b is the correct answer, because firms can easily grant stock options to employees
without an ESOP.
POINTS: 1
DIFFICULTY: Difficulty: Moderate
LEARNING OBJECTIVES: INTE.GENE.16.68 - LO: 10-3
{372}
First.
A broad-minded and sympathetic representative of America,
fully authorized to treat, and a lover of peace.
Second.
A strict discipline amongst the American forces.
Third,
The principal aim and object of the Tagal insurrection must be
secured.
F. H. Sawyer,
The Inhabitants of the Philippines,
page 113-114 (New York: Charles Scribner's Sons).
{374}
Admiral Dewey,
Letter, August 29, 1898,
Replying to inquiry of War Department.
General Merritt,
statement before United States Peace Commission at Paris,
October 4, 1898.
General F. V. Greene,
Memorandum concerning the Philippine Islands,
made August 27, 1898.
Major J. F. Bell
[of Engineers, on "secret service"]
Letter to General Merritt, Manila, August 29, 1898.
{375}
John Foreman,
Testimony before United States Peace Commission at Paris.
"The excuse that they [the Filipinos] are not ripe for
independence is not founded on facts. The Filipinos number
more educated people than the kingdom of Servia and the
principalities of Bulgaria and Montenegro. They have fewer
illiterates than the states of the Balkan peninsula, Russia,
many provinces of Spain and Portugal, and the Latin republics
of America. There are provinces in which few people can be
found who do not at least read. They pay more attention to
education than Spain or the Balkan states do. There is no lack
of trained men fit to govern their own country, and indeed in
every branch, because under the Spanish rule the official
business was entirely transacted by the native subalterns. The
whole history of the Katipunan revolt and of the war against
Spain and America serves to place in the best light the
capability of the Filipinos for self-government."
F. Blumentritt,
The Philippine Islands,
page 61.
PHILIPPINE ISLANDS: A. D. 1898-1899 (December-January).
Instructions by the President of the United States to
General Otis, Military Governor and Commander in
the Philippines.
Their proclamation to the people of the Islands as
modified by General Otis.
The effect.
{376}
WILLIAM McKINLEY."