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Question:36 - 27854
, n5 Z. J% A* lWhich of the following is NOT a possible consequence of takeover defenses? Takeover defenses:5 z& i3 S0 t$ z. X
A)6 j& G- s# e d8 s, `. J+ y1 `
provide managers greater job security.$ K( u% _) _. ~9 Y* R
B)/ [+ Z6 M! G& R% e5 D7 E
may start a bidding war for the firm’s shares. A3 w( V* M- S, a8 Q4 T
C)
/ K9 G9 E3 I+ L; o5 S& c9 [change the firm’s legal status from public to private.$ }2 n3 y4 \: p2 l/ ]) {
D)0 j* I. a9 R: M
force the acquirer to negotiate directly with the firm’s Board of Directors.
h6 ] c- Q3 L* ?* H/ Z& ?3 G+ HQuestion:37 - 27901% k! E9 v7 R; `' A1 w( b* ?
Which of the following statements regarding internal capital markets is FALSE?) U7 P i. C0 k% t+ g
A)
1 o+ ~1 a! N& q0 v' |Political obstacles are likely to exist in efficiently allocating resources.
' P8 M9 q5 N8 ~) Z3 h% H* nB)& _* v$ U. S6 r6 f+ j( y0 `8 D5 z
Management can channel free cash flow from mature business lines to high growth ventures.3 P7 ]/ p+ v! |5 |% Q
C)
" p; ]' k# S: PThe firm can credibly signal the quality of new ventures.
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2 c) b U$ p \& h! L) ]+ {* ^3 QThe firm can save money by not issuing securities in the capital markets.& F5 C% `( a* |; N9 b* }
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Question:38 - 9865
: j5 i3 S! F- dOverestimating the growth rate of a firm in using a valuation model would result in a value that is likely to be:
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; V; R' k+ Q3 m+ }. M' gtoo low. {9 i8 @! W' f) }+ A! z
B)
- G9 B0 u+ A' Ccan't tell from this information.
7 e7 s; q! |( B2 L2 E- ~C)( g, I3 F9 W1 W
too high.1 l5 w' u2 \, r+ p: J8 p# o3 Z
D)0 ]; O! l7 n- C% Z& c
very accurate.
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Question:39 - 9849/ P& g1 u/ M3 e% |& M
The goal of asset valuation, based on the expected future cash flows of an asset, is to establish an asset’s:
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' r% F* h) G6 T) h7 w* W. irelative value.
4 ?9 B; E& N9 ~. S! F. ^B)
3 L- A. f* B n* Xfuture value.
& N e; P* ?! i, p7 w; i1 kC)
0 N( A+ D3 A3 v/ Z. C7 w) q- H8 i4 {intrinsic value.6 ?9 [; Q& s2 @4 [1 R
D)
$ f' ?$ }- n C+ ^# I: D$ S. ?. vmarket value.
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/ E0 s2 [8 Q9 j/ E, O9 Z3 JQuestion:40 - 99472 p* O) e6 ]% Z" J
Roger Miller is the CEO of MetaCorp. MetaCorp is attempting to implement a strategic plan to establish a sustainable competitive advantage. The main thrust of the plan is to achieve a market share of at least 18 percent. Miller hires a strategy consultant to review the plan. The consultant concludes that MetaCorp’s strategic plan is inadequate. Which of the following is a likely reason for the consultant’s conclusion?7 c: f. S( x0 H5 X. ?
A)! d( ]! `" p. Y+ p. S
An 18 percent market share is sufficient to create a sustainable competitive advantage.9 w' j; ?! ?8 Q$ D% K
B) n: B4 U3 A; D' W$ b r7 Z
An 18 percent market share is too large to create a sustainable competitive advantage.
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0 s- r, D6 f% X+ Q C$ tMarket share goals are not a competitive strategy.
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The market share goal must be considered in relation to the number of competitors.9 T, H2 n; l$ F9 F! p: S6 k& ~ t4 T
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