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Question:36 - 27854
X+ T9 r9 d9 E; |5 H. cWhich of the following is NOT a possible consequence of takeover defenses? Takeover defenses:
, T, e1 u/ s/ P1 F9 ]A)
$ o' ^8 L4 i, I# e1 K6 Eprovide managers greater job security.( I/ X# W- [! q& O2 J/ [# D
B)
. \" p& @- u/ ]3 Ymay start a bidding war for the firm’s shares.. u$ S- @6 w+ S+ I
C)
) r. Y9 A: B. k1 H! J4 V$ s- Pchange the firm’s legal status from public to private.. s+ w/ F2 E8 F7 ~
D)
% F" e+ ]0 a) n1 G& U, Fforce the acquirer to negotiate directly with the firm’s Board of Directors.& o5 ?+ L9 [5 p% E
Question:37 - 27901
9 d0 S) j Q2 ], v# O& BWhich of the following statements regarding internal capital markets is FALSE?
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: {& D3 H. G* KPolitical obstacles are likely to exist in efficiently allocating resources.. S9 s4 F; \- ?6 F3 f6 Q, V
B), g! }4 i, ]" Y
Management can channel free cash flow from mature business lines to high growth ventures.' c9 u. y9 g/ @9 ~" u
C)
+ X3 G8 N1 l& HThe firm can credibly signal the quality of new ventures.
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The firm can save money by not issuing securities in the capital markets.# E. B4 s2 a/ S: Q# F
2 ]/ z$ S3 ~) c2 W8 HQuestion:38 - 9865/ f& w P- t( d. S/ I& _0 f
Overestimating the growth rate of a firm in using a valuation model would result in a value that is likely to be:
) |" X- w5 O. J" \A)
" }9 \% j& h4 t4 D- ?" utoo low. \1 k6 l; `# R8 _( ^& C& a
B)/ {5 Q( N+ ^( w6 Z& {6 w3 |) j B
can't tell from this information.! u5 P# R1 B p4 x# `7 |* m6 a
C)
* @* k' T$ B" O) O" H8 e- dtoo high.1 k C1 o! g8 I, c/ l/ p- l
D)
. C2 C+ i8 ~* M) R f! a# overy accurate.
2 T. o8 f, R( a% V$ P1 O" Q6 u( Y9 G% B9 B5 S, i1 T
/ W) L9 _$ Z/ M+ D8 ^4 NQuestion:39 - 98494 E$ x' {) o, y n
The goal of asset valuation, based on the expected future cash flows of an asset, is to establish an asset’s:
$ x% t, S; f" f5 R4 Q$ q4 B* EA)! R( O0 o9 K. y- B
relative value.$ @- u7 Z7 B; f1 _* P: l
B) A- Z! C! T$ L& Z
future value.
9 C0 e; r2 S1 `. ^+ x8 YC)
! p' U5 e2 O Y( C& ?; ^intrinsic value.) f4 ?' ?# B! ~# @6 s
D), h3 j9 b+ F8 p; d Y' a
market value.; |/ d" u8 Q4 S5 r; q+ Y$ }
i# H" U/ s' Y2 E" xQuestion:40 - 9947
0 D( R$ x8 x! RRoger 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?
' n6 ~' j- }2 Y9 IA)7 Q* R) `8 d$ c, r
An 18 percent market share is sufficient to create a sustainable competitive advantage.
& S$ X E6 X2 xB)
0 `1 O! r8 ]3 O8 `An 18 percent market share is too large to create a sustainable competitive advantage.
0 c3 i% }) ]8 ]0 ~. ~" Y+ jC), D! E) [" O# W6 T
Market share goals are not a competitive strategy.- J$ q! ` D8 Q( L( s8 d
D)) ], {1 _! g: T; y! b7 @
The market share goal must be considered in relation to the number of competitors.: O) [# n! C3 T
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