Fin 370 Exam 1

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Fin 370 Exam 1 review: 1. A well-established, large firm U.S. based MNE will probably not be able to overcome which of the following obstacles to maximizing firm value? A) Access to capital B) An open market place C) High quality strategic management D) None of above ✔ 3. In determining why a firm becomes multinational there are many reasons. One reason is that the firm is a market seeker. Which is not a reason why market seeking firms produce in foreign countries? A) Political safely and small likelihood of government expropriation of assets. ✔ 4. The phase of the globalization process characterized by imports from foreign suppliers and exports to foreign buyers is called? B) International trade phase ✔ 5. The author describe the multinational phase of globalization for a firm as one characterized by the______? C) Ownership of assets and enterprises in foreign countries. ✔ 6. Which of the following is an advantage to exporting goods to reach international markets rather than entering into some form of FDI? B A) a greater risk of losing markets to copycat goods producers B) Fewer agency costs ✔ C) An inability to exploit R&D as effectively as if also invested abroad D) Fewer direct advantages from research and development 7. Which of the following is NOT a form of FDI? B A) Joint venture B) Exporting ✔ C) Wholly-owned affiliate D) Greenfield investment 8. Which of the following is NOT a potential disadvantage of licensing relative to FDI? D A) possible improvement of the technology by the local license, D) All of above ✔ 9. Which of the following is NOT a potential disadvantage of cross-border acquisitions? D A) Mis-pricing foreign assets and paying too much for the acquisition. B) The meshing of different corporate cultures. C) Host government intervention in the post-acquisition process. 10. Which of the following
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