Deck 7: Shareholders and Shareholder Activism

Question 1

"Wall Street walk" is a common expression for individual shareholders whose only activity is selling shares they are unhappy with.

Answer 1

True

Question 2

Around the world, the two most common types of large shareholders that actively participate in management are

A)Family-Owners and State-Owners
B)Individual and Institutional
C)Individual and Family-Owners
D)Individual and State-Owners
E)Institutional and State-Owners

Answer 2

A

Question 3

Individual shareholders, large shareholders, and institutional shareholders are mutually exclusive categories of shareholders.

Answer 3

False

Question 4

Proxy fights to change directors are an easy and cheap way for shareholders to change directors at their firm.

Question 5

Which type of institutional investor is the most active in monitoring the firm?

A)Mutual Funds
B)Pension Funds
C)Insurance Company
D)Bank trusts
E)Venture Capitalists

Question 6

Public firms in the U.S.and the U.K.have the most dispersed ownership structures in the world.

Question 7

Shareholder activism is always a good way to predict good firm performance.

Question 8

An institutional shareholder is usually a large percentage shareholder of a firm.

Question 9

Today, anyone owning more than $5,000 or 1% of a firms stock on a continuous basis for at least 2 years is able to submit a proposal to be considered and voted on at a shareholders' meeting.

Question 10

Which is/are a) roadblocks) regarding effective shareholder activism?

A)Short-term view of investors.
B)Conflict of interests by private fund advisors, hired by corporate executives to manage pension assets.
C)Under the Investment Company Act, mutual funds that own more than 10% of any one company must face additional regulatory and tax burdens.
D)All of the above.
E)None of the above.

Question 11

In a "derivative" lawsuit, the shareholders file a claim on behalf of the company and any recovery from managers or directors is paid to the company not to the shareholders

Question 12

Pension funds tried to influence the firm by targeting the poor corporate performers and pushing them to reform.

Question 13

Most shareholder proposals submitted by individual investors do not pass, especially those that go against management desires.

Question 14

If managers waste company assets for personal use, shareholders are.not permitted to use the legal system to sue the managers.

Question 15

Which of the following makes shareholder activism effective?

A)Activists having a short-term view.
B)Selling shares rather than changing the company.
C)Legal regulations
D)Companies that don't listen to activists
E)None of the above.