Test Bank For International Financial Management 2th Edition Jeff Madura Ariful Hoque Chandrasekhar Krishnamurti Chapter 1-20
Chapter 1—Multinational Financial Management: An Overview MULTIPLE CHOICE 1. The commonly accepted goal of the MNC is to: a. maximise short-term earnings. b. maximise shareholder wealth. c. minimise risk. d. A and C. e. maximise international sales. ANS: B PTS: 1 DIF: Easy A-HEAD:LO01.01 MANAGEMENT GOALS AND ORGANISATIONAL STRUCTURE 2. With regard to corporate goals, an MNC is mostly concerned with maximising ____, and a purely domestic firm is mostly concerned with maximising ____. 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 A-HEAD:LO01.01 MANAGEMENT GOALS AND ORGANISATIONAL STRUCTURE 3. For the MNC, agency costs are typically: 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 A-HEAD:LO01.01 MANAGEMENT GOALS AND ORGANISATIONAL STRUCTURE
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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. ANS: D PTS: 1 DIF: Moderate A-HEAD:LO01.01 MANAGEMENT GOALS AND ORGANISATIONAL STRUCTURE 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 © 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.