Exam
Name___________________________________
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1)Countries with strong
... [Show More] shareholder protection tend to have more valuable stock markets 1) and more companies listed on stock exchanges per capita than countries with weak protection.
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the quest
2)Corporate governance can be defined as 2)
A) the economic, legal, and institutional framework in which corporate control and cash flow rights are distributed among shareholders, managers and other stakeholders of the company.
B)the rules and regulations adopted by boards of directors specifying how to manage companies.
C)the government-imposed rules and regulations affecting corporate management.
D)the general framework in which company management is selected and monitored.
4)Corporate governance structure
A) varies a great deal across countries.
B)has become homogenized due to cross-listing of shares of many public corporations.
C)has become homogenized following the integration of capital markets. D)none of the options
Answer:A
)The genius of public corporations stems from their capacity to allow efficient sharing or 5) spreading of risk among many investors, who can buy and sell their ownership shares on liquid stock exchanges and let professional managers run the company on behalf of shareholders. This risk sharing stems from
A) the limited liability of bondholders. B)the limited liability of shareholders.
C)the liquidity of the shares. D)the limited ability of shareholders.
6)In a public company with diffused ownership, the board of directors is entrusted with 6) A) monitoring the management and safeguarding the interests of shareholders.
B)monitoring the auditors and safeguarding the interests of shareholders.
C)monitoring the shareholders and safeguarding the interests of management. D)none of the options [Show Less]