Question 1

Which of the following statements is true about strategic control systems?

Accepted Answer

A)   They are usually set by government regulators and require top management to follow them.
B)   Their primary purpose is to foster on-the-job consumption.
C)   Their purpose is to ensure that the wealth of stockholders is maximized.
D)   They relieve employees and management of legal and ethical constraints.
E)   They are designed to encourage information asymmetry.

Question 2

Which of the following statements is true about corporate raiders?

Accepted Answer

A)   They are underperforming corporations that have been acquired by other companies.
B)   They are government-funded organizations that help underperforming companies recover.
C)   They may purchase stock in a company to take over the business and run it more efficiently.
D)   They lack power to interfere with the top management decisions.
E)   They discourage companies from pursuing strategies that help maximize stockholder wealth.

Question 3

Strategic control systems are the primary governance mechanisms established within a company to reduce the scope of the agency problem between levels of management.

Accepted Answer

A) True 
 B)False

Question 4

A stock option is a right to buy:

Accepted Answer

A)   shares of the company's stock at the stock's current price.
B)   shares of the company's stock at half the stock's current price.
C)   shares of the company's stock at a predetermined price at some point in the future.
D)   bonds issued by the company.
E)   stock in an underperforming company.

Question 5

Which of the following statements concerning profitability and profit growth is NOT true?

Accepted Answer

A)   Attaining future profit growth may require investments that reduce the current rate of profitability.
B)   Managers must find the right balance between profitability and profit growth.
C)   Too much emphasis on current profitability at the expense of profit growth can make an enterprise less attractive to shareholders.
D)   Satisfying the claims of other key stakeholder groups happens at the risk of decreased profitability and profit growth.
E)   Too much emphasis on profit growth can reduce profitability and make an enterprise less attractive to shareholders.

Question 6

Alpha LLC is a large paint manufacturing company. Despite government regulations, the company has been illegally disposing of its chemical wastes in a lake, which is an important habitat for several fish and birds. Which of the following ethical concerns is illustrated in this scenario?

Accepted Answer

A)   On-the-job consumption 
B)   Opportunistic exploitation
C)   Environmental degradation
D)   Self-dealing
E)   Substandard working conditions

Question 7

While many agency relationships work well, problems arise when agents and principals have different goals.

Accepted Answer

A) True 
 B)False

Question 8

Strike price is the price at which the stock was trading when the option was originally granted.

Accepted Answer

A) True 
 B)False

Exam 11: Corporate Performance, Governance, and Business Ethics

Which of the following statements concerning profitability and profit growth is NOT true?

Correct Answer
verified

Alpha LLC is a large paint manufacturing company. Despite government regulations, the company has been illegally disposing of its chemical wastes in a lake, which is an important habitat for several fish and birds. Which of the following ethical concerns is illustrated in this scenario?

Correct Answer
verified

While many agency relationships work well, problems arise when agents and principals have different goals.

Correct Answer
verified

Strategic control systems are the primary governance mechanisms established within a company to reduce the scope of the agency problem between levels of management.

Correct Answer
verified

A stock option is a right to buy:

Correct Answer
verified

Which of the following statements is true about strategic control systems?

Correct Answer
verified

Which of the following statements is true about corporate raiders?

Correct Answer
verified

Strike price is the price at which the stock was trading when the option was originally granted.

Correct Answer
verified

Exam 11: Corporate Performance, Governance, and Business Ethics

Which of the following statements concerning profitability and profit growth is NOT true?

Correct AnswerverifiedShow Answer

Alpha LLC is a large paint manufacturing company. Despite government regulations, the company has been illegally disposing of its chemical wastes in a lake, which is an important habitat for several fish and birds. Which of the following ethical concerns is illustrated in this scenario?

Correct AnswerverifiedShow Answer

While many agency relationships work well, problems arise when agents and principals have different goals.

Correct AnswerverifiedShow Answer

Strategic control systems are the primary governance mechanisms established within a company to reduce the scope of the agency problem between levels of management.

Correct AnswerverifiedShow Answer

A stock option is a right to buy:

Correct AnswerverifiedShow Answer

Which of the following statements is true about strategic control systems?

Correct AnswerverifiedShow Answer

Which of the following statements is true about corporate raiders?

Correct AnswerverifiedShow Answer

Strike price is the price at which the stock was trading when the option was originally granted.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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