TCQT PART 1

The commonly accepted goal of the MNC is to:

• maximize short-term earnings

• maximize shareholder wealth

• minimize risk

• A and C.

Which of the following is not a form of corporate contrd that could reduce agency problems for an MNC?

• stock options.

• hostile takeover threat.

• investor monitoring

• all of the above are forms of corporate control that could reduce agency problems for an MNC.

Which of the following theories suggests that firms seek to penetrate new markets over time?

• theory of comparative advantage.

• product cycle theory.

• imperfect markets theory

• none of the above

Licensing is the process by which a firm provides its technology (copyrights, patents, trademarks, or trade names) in exchange for fees or some other specified benefits.

• true

• false

According to the text, products and services are generally becoming____ standardized across countries, which tends to ____the globalization of business

• more; encourage

• more; discourage

• less; encourage

• less; discourage

The Single European Act of 1987:

• reduced competition in most industries.

• eliminated competition in many industries

• increased competition in most industries

• reduced effiency in most industries

____are most commonly classified as a direct foreign investment.

• Foreign acquisitions

• Exporting transactions

• Purchases of international stocks

• Licensing agreements

Which of the following is not mentioned in the text as a constraint interfering with the MNC goal?

• economic constraints.

• environmental constraints.

• regulatory constrainst

• ethical constraints

Which of the folloving is not a way in wich agere problens car be reduced

through corporate control?

• executive compensation.

• threat of hostile takeover.

• acquisition of a foreign subsidiary.

• monitoring by large shareholders.

Due to the larger opportunity set of funding sources around the world from which an MNC can choose , an MNC may be able to obtain capital at a lower cost than a purely domestic firm

• true

• false