Question 1

A ________ merger occurs when different companies at the same stage or level merge.

Accepted Answer

A)  standardized 
B)  horizontal 
C)  conglomerate 
D)  vertical 
E)  operational 
A)  standardized 
B)  horizontal 
C)  conglomerate 
D)  vertical 
E)  operational

Question 2

Strategic alliances are ________.

Accepted Answer

A)  internal agreements formed between the subsidiaries of a company 
B)  not helpful when a company has to gain credibility in a new field 
C)  a means of permanently integrating two companies in a business 
D)  an alternative to mergers and acquisitions with less risk and work 
E)  not helpful when a company's aim is expanding its market presence 
A)  internal agreements formed between the subsidiaries of a company 
B)  not helpful when a company has to gain credibility in a new field 
C)  a means of permanently integrating two companies in a business 
D)  an alternative to mergers and acquisitions with less risk and work 
E)  not helpful when a company's aim is expanding its market presence

Question 3

A corporation primarily or wholly owned by another company is known as a(n)________.

Accepted Answer

A)  domestic company 
B)  alien company 
C)  subsidiary 
D)  parent company 
E)  holding company 
A)  domestic company 
B)  alien company 
C)  subsidiary 
D)  parent company 
E)  holding company

Question 4

A public corporation refers to a corporation ________.

Accepted Answer

A)  that is allowed to sell stock only to a limited number of investors 
B)  whose stock is sold to general people 
C)  that is owned solely by the federal government 
D)  that is owned solely by state/federal government 
E)  whose stock is not traded in stock exchanges or other markets 
A)  that is allowed to sell stock only to a limited number of investors 
B)  whose stock is sold to general people 
C)  that is owned solely by the federal government 
D)  that is owned solely by state/federal government 
E)  whose stock is not traded in stock exchanges or other markets

Question 5

All owners in a general partnership and the general partners in a limited partnership face the same unlimited liability as sole proprietors.

Accepted Answer

A) True 
 B)False

Question 6

Compare and contrast a general partnership and a limited partnership.

Accepted Answer

In a general partnership,all partners ha

Question 7

A(n)________ is an unincorporated company owned by two or more people.

Accepted Answer

A)  limited company 
B)  partnership 
C)  corporation 
D)  S corporation 
E)  proprietorship 
A)  limited company 
B)  partnership 
C)  corporation 
D)  S corporation 
E)  proprietorship

Question 8

Government agencies require publicly traded companies to publish extensive and detailed financial reports.

Accepted Answer

A) True 
 B)False

Question 9

A partnership is a company that is owned by two or more people but is not a corporation.

Accepted Answer

A) True 
 B)False

Question 10

Robex Retail is a retail chain that has more than 390 stores in the United States.The directors of the company decide to launch operations in Italy to increase the company's market reach.Many of the shareholders think that this decision is not appropriate in light of the economic slowdown in Europe.A group of shareholders unites to pressure the board of directors to change their decision.This is an example of ________.

Accepted Answer

A)  shareholder protection 
B)  shareholder activism 
C)  hostile takeover 
D)  corporate governance 
E)  shareholder resolution 
A)  shareholder protection 
B)  shareholder activism 
C)  hostile takeover 
D)  corporate governance 
E)  shareholder resolution

Question 11

A disadvantage of the corporate structure is that it ________.

Accepted Answer

A)  limits the business's ability to raise capital 
B)  limits the liquidity that businesses have 
C)  increases the risk of conducting business 
D)  involves strict reporting requirements 
E)  imposes unlimited liability on the owners 
A)  limits the business's ability to raise capital 
B)  limits the liquidity that businesses have 
C)  increases the risk of conducting business 
D)  involves strict reporting requirements 
E)  imposes unlimited liability on the owners

Question 12

Which of the following is a key advantage of incorporating a business as a sole proprietorship?

Accepted Answer

A)  Owners receive tax exemptions when a business is a sole proprietorship. 
B)  It helps proprietors file taxes separately from their personal income. 
C)  It is easy to establish and requires less paperwork than other structures. 
D)  Owner's risk is limited to the extent he/she has invested in the business. 
E)  Risk associated with sole proprietorship is less, compared to other structures. 
A)  Owners receive tax exemptions when a business is a sole proprietorship. 
B)  It helps proprietors file taxes separately from their personal income. 
C)  It is easy to establish and requires less paperwork than other structures. 
D)  Owner's risk is limited to the extent he/she has invested in the business. 
E)  Risk associated with sole proprietorship is less, compared to other structures.

Question 13

Joint ventures ________.

Accepted Answer

A)  let companies create tightly integrated operations 
B)  are less risky than strategic alliances 
C)  are riskier to a firm than formal mergers 
D)  disrupt the original companies and their business 
E)  would not help companies gain credibility in new fields 
A)  let companies create tightly integrated operations 
B)  are less risky than strategic alliances 
C)  are riskier to a firm than formal mergers 
D)  disrupt the original companies and their business 
E)  would not help companies gain credibility in new fields

Question 14

One company buys a controlling interest in the voting stock of another company in a merger.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a key difference between a master limited partnership (MLP)and other forms of partnerships?

Accepted Answer

A)  A MLP allows partnerships to sell units of ownership to the general public. 
B)  Other partnerships should have more members than an MLP. 
C)  Other partnerships have double-taxation disadvantage unlike an MLP. 
D)  A MLP allows the partners to have limited liability on their investments. 
E)  A MLP is characterized by double taxation unlike the other forms of partnerships. 
A)  A MLP allows partnerships to sell units of ownership to the general public. 
B)  Other partnerships should have more members than an MLP. 
C)  Other partnerships have double-taxation disadvantage unlike an MLP. 
D)  A MLP allows the partners to have limited liability on their investments. 
E)  A MLP is characterized by double taxation unlike the other forms of partnerships.

Question 16

A horizontal merger occurs when different companies at the same stage or level merge.

Accepted Answer

A) True 
 B)False

Question 17

Carton Life is an insurance firm.The firm wants to enter an Asian country that recently removed protectionist barriers in the insurance industry.The company wants to enter the country with the help of a local firm.However,the company does not want to permanently integrate with another firm.Which of the following arrangements is most suited for this company?

Accepted Answer

A)  amalgamation 
B)  acquisition 
C)  merger 
D)  joint venture 
E)  strategic alliance 
A)  amalgamation 
B)  acquisition 
C)  merger 
D)  joint venture 
E)  strategic alliance

Question 18

A vertical merger occurs when ________.

Accepted Answer

A)  a merger expands the geographic range of markets that it can serve 
B)  different stages or levels of the same industry unite 
C)  different companies at the same stage or level unite 
D)  a merger expands the mix of goods and services available for sale 
E)  two companies from unrelated industries unite to become a single company 
A)  a merger expands the geographic range of markets that it can serve 
B)  different stages or levels of the same industry unite 
C)  different companies at the same stage or level unite 
D)  a merger expands the mix of goods and services available for sale 
E)  two companies from unrelated industries unite to become a single company

Question 19

Corporate officers are the ________.

Accepted Answer

A)  people who elect directors of a company 
B)  official representatives of shareholders 
C)  top executives who run a corporation 
D)  middle level managers of a corporation 
E)  lower level employees of an organization 
A)  people who elect directors of a company 
B)  official representatives of shareholders 
C)  top executives who run a corporation 
D)  middle level managers of a corporation 
E)  lower level employees of an organization

Question 20

With the ________ tactic,a third company is invited to acquire a company that is in danger of being swallowed up in a hostile takeover.

Accepted Answer

A)  countdown 
B)  proxy fight 
C)  direct offer 
D)  tender offer 
E)  white knight 
A)  countdown 
B)  proxy fight 
C)  direct offer 
D)  tender offer 
E)  white knight

A ________ merger occurs when different companies at the same stage or level merge.

Strategic alliances are ________.

A corporation primarily or wholly owned by another company is known as a(n)________.

A public corporation refers to a corporation ________.

All owners in a general partnership and the general partners in a limited partnership face the same unlimited liability as sole proprietors.

Compare and contrast a general partnership and a limited partnership.

A(n)________ is an unincorporated company owned by two or more people.

Government agencies require publicly traded companies to publish extensive and detailed financial reports.

A partnership is a company that is owned by two or more people but is not a corporation.

A disadvantage of the corporate structure is that it ________.

Which of the following is a key advantage of incorporating a business as a sole proprietorship?

Joint ventures ________.

One company buys a controlling interest in the voting stock of another company in a merger.

Which of the following is a key difference between a master limited partnership (MLP)and other forms of partnerships?

A horizontal merger occurs when different companies at the same stage or level merge.

A vertical merger occurs when ________.

Corporate officers are the ________.

With the ________ tactic,a third company is invited to acquire a company that is in danger of being swallowed up in a hostile takeover.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

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Exam 5: Forms of Ownership

A ________ merger occurs when different companies at the same stage or level merge.

Strategic alliances are ________.

A corporation primarily or wholly owned by another company is known as a(n)________.

A public corporation refers to a corporation ________.

All owners in a general partnership and the general partners in a limited partnership face the same unlimited liability as sole proprietors.

Compare and contrast a general partnership and a limited partnership.

A(n)________ is an unincorporated company owned by two or more people.

Government agencies require publicly traded companies to publish extensive and detailed financial reports.

A partnership is a company that is owned by two or more people but is not a corporation.

A disadvantage of the corporate structure is that it ________.

Which of the following is a key advantage of incorporating a business as a sole proprietorship?

Joint ventures ________.

One company buys a controlling interest in the voting stock of another company in a merger.

Which of the following is a key difference between a master limited partnership (MLP)and other forms of partnerships?

A horizontal merger occurs when different companies at the same stage or level merge.

A vertical merger occurs when ________.

Corporate officers are the ________.

With the ________ tactic,a third company is invited to acquire a company that is in danger of being swallowed up in a hostile takeover.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

Filters