The purchasers in a buyout often obtain financial and strategic assistance from a _ who, as a sponsor, usually finances the transaction with equity contributed by a number of investors and debt borrowed from several sources. a. buyout specialist. b. LBO intermediary c. finance company d. venture capital firm ANSWER A
Date: September 19th, 2020
In many cases a firm that has gone private via an LBO subsequently re-emerges as a publicly traded firm (via another IPO). This transaction is called a a. reprise IPO. b. resumption. c. reverse LBO. d. rollover. ANSWER C
Date: September 19th, 2020
In the EOQ model, if carrying costs increase while all other costs remain unchanged, the number of orders placed would be expected to increase. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Bankruptcy risk plays a role in the propagation of recessions by: a. causing a backlog in the caseloads of bankruptcy courts. b. causing firms to increase capital expenditures as the economy begins to slow. c. forcing firms to pay down debt. d. straining the liquidity positions of both individuals and firms, both of which try […]
Date: September 19th, 2020
When the Federal Reserve Board’s open market committee buys T-bills, it is pursuing a. contractionary monetary policy. b. expansionary monetary policy. c. fiscal discipline. d. a policy of balancing the federal budget. ANSWER B
Date: September 19th, 2020
In the EOQ model, the total cost is minimized at the point where the order costs and carrying costs are equal. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The reorder point is an inventory management system that compares production needs to available inventory balances and determines when orders should be placed for various items on a firm’s bill of materials. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
In a takeover bid, target management may offer to repurchase the bidder’s shares at a large premium if the bidder promises to cease and desist. The premium payoff is called (i), and the agreement to cease and desist is called a (ii). (i) (ii) a. subornation stand down agreement b. subornation standstill agreement c. greenmail […]
Date: September 19th, 2020
TRUE or FALSE. Agency costs of managerial discretion are one of the few costs that are not exacerbated when a firm is under financial distress. a. TRUE b. FALSE ANSWER B
Date: September 19th, 2020
The ABC system is an inventory management technique for determining the optimal order quantity for an item of inventory. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
