Chapter 12

The most preferred form of securities for funding by firms in the U.S. has been

a.debt

b.preferred stock

c.common stock

d.stock derivatives

The cost of the heavy reliance on banks by Japanese and German companies is

a.less freedom of action

b.higher interest charges on loans

c.lower deposit rates

d.more control by the government

Which one of the following is a consequence of a well-functioning financial market?

a.greater capital accumulation

b.better projects get financed

c.lower cost of capital

d.all of the above

______ is the process of replacing bank loans with securities issued in public markets.

a.A drawdown

b.Securitization

c.Capital productivity

d.Regulatory arbitrage

The difference between countries in terms of company controls can be categorized into market-oriented and ____________ systems.

a.bank-centered

b.Anglo-Saxon

c.debt-denominated

d.keiretsu

Suppose the government of Ghana is seeking concessionary financing to build 100 new schools, which of the following agencies is most likely to provide such financing?

a.the World Bank

b.Federal Reserve

c.Citibank

d.Southern Miss U Board of Regents...

The most important source of funds used by companies around the world is

a.internally generated cash

b.shortterm external funds

c.issues of new stock

d.public debt securities

The most important change in Japanese corporate finance in recent years has been

a.the shift from internal funds to bank loans

b.the shift from internal funds to stock issues

c.the shift from external funds to internal funds

d.the dramatic rise in the payment of dividends

Selling stock overseas is attractive to corporations because it

a.may raise the price of the company's stock

b.improves the company's visibility in local markets

c.provides a pool of patient investors who are not focusing exclusively on next quarter's profits

d.a and b only

Which of the following banking practice would be found more often under the CEJ model of corporate governance?

a.emphasis on shareholder value

b.the importance of equity financing

c.control by institutional shareholders

d.universal banking

Which one of the following factors does NOT promote well-functioning financial markets?

a.secure property rights

b.high tariffs

c.contracts that are easily enforced

d.transparency in financial statements

The process of securitization reflects

a.new technology that has lowered the costs of compiling, accessing, and manipulating data

b.financial deregulation that raised the cost of funds to banks

c.lower costs of accessing public markets directly

d.all of the above

Why are privately placed bonds more difficult to sell than publicly issued bonds?

a.they are usually commercial bank loans

b.the presence of customized covenants

c.funds come from private investors

d.underwriting is required

Which one of the following securities in the foreign bond markets has the least amount of risk to the investor?

a.samurai bond

b.shogun bond

c.convertible bond

d.equity warrants

Which one of the following banks is considered the most important in the development bank industry?

a.Asian Development Bank

b.World Bank

c.African Development Bank

d.European Bank for Reconstruction and Development

A multinational corporation attempting to secure an airport construction project involving billions of dollars in cost would be best advised to apply to the _________ for funding.

a.World Bank

b.London banking market

c.New York bond market

d.Tokyo foreign bond market

need these answers asap