12/6/22, 4:52 PM Corporate Finance

NAMA  : 
KELAS  : 
Corporate Finance
25 Pertanyaan TANGGAL : 

1. Stock-based insolvency is a:

A a: income statement measurement B e: Both B and C.

C d: Both A and C. D c: only a book value measurement.

E b: balance sheet measurement.

2. Flow-based insolvency is

c: when operating cash flow is insufficient

A B b: a negative equity position.
to meet current obligations.

C e: Both C and D. D d: inability to pay one’s debts.

E a: a balance sheet measurement.

3. Financial restructuring can occur as:

A a: a private workout B d: Both A and C.

C b: an employee buy-out. D c: a bankruptcy reorganization.

E e: Both B and C.

4. Financial distress can involve which of the following

A All of the above. B liquidation.

C asset restructuring D financial restructuring

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5. The difference between liquidation and reorganization is:

liquidation terminates only non-

A None of the above. B profitable operations and profitable
reorganization terminates only operations

reorganization terminates all operations

liquidation only deals with current assets
C of the firm and liquidation only terminates D
and reorganization only consolidates debt.
non-profitable operations.

liquidation terminates all operations and

E reorganization maintains the option of the
firm going concern.

6. Prepackaged bankruptcies are:

described as a combination of a
the easiest way to transfer wealth to the
A completed private workout and the formal B
shareholders.
bankruptcy filing.

described as a combination of a private

C None of the above. D
workout and a liquidation.

E All of the above.

7. The complete absorption of one company by another, wherein the acquiring firm retains its
identity and the acquired firm ceases to exist as a separate entity, is called

A tender offer. B divestiture.

C merger. D consolidation.

E spinoff.

8. A merger in which an entirely new firm is created and both the acquired and acquiring firms
cease to exist is called a:

A consolidation. B tender offer.

C spinoff. D conglomeration

E divestiture.

9. The acquisition of a firm in the same industry as the bidder is called a _____ acquisition

A horizontal B vertical

C conglomerate D forward

E backward

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12/6/22, 4:52 PM Corporate Finance

10. An attempt to gain control of a firm by soliciting a sufficient number of stockholder votes to
replace the current board of directors is called a:

A proxy contest. B leveraged buyout.

C going-private transaction. D consolidation.

E tender offer.

11. Generous compensation packages paid to a firm’s top management in the event of a
takeover are referred to as:

A poison puts. B shark repellents.

C bear hugs. D white knights.

E golden parachutes

12. The distribution of shares in a subsidiary to existing parent company stockholders is called
a(n):

A lockup transaction B spin-off.

C split-up. D equity carve-out.

E bear hug.

13. an agreement on exchange rates today for settlement in the future.

A spot B future

C swap D none of the above

14. the sale (purchase) of a foreign currency with a simultaneous agreement to repurchase
(resell) it some time in the future.

A swap B future

C none of the above D spot

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12/6/22, 4:52 PM Corporate Finance

15. The interest rate parity theorem states that :

if interest rates
foreign currency will be
are higher
A None of the above B selling at a discount in
domestically,
the forward market.
the

if interest rates if interest rates

foreign currency will be foreign currency will be
are lower are lower
C selling at a premium in D selling at a discount in the
domestically, domestically,
the forward market. forward market.
the the

16. purchasing power parity (PPP):

change in the price level of commodities in

one country relative to the rate of change
A in the price level in another determines
the rate of change of the exchange rate
between the two countries
the idea that the exchange rate adjusts so
that a market basket of goods costs the
B
same regardless of the country in which it
is purchased

In an efficient foreign exchange market,

C D none of the above
speculation is a zero-NPV activity.

17. relate to Financial distress:

Stock- when a firm has negative net

based worth, so the value of its assets Flow-based insolvency occurs when OCF is
A B
insolvencyis less than the value of its insufficient to meet current obligations.
occurs debts.

firm is
occurs when a firm’s operating
forced to
cash flows (OCFs) are not
C all of the above D take
sufficient to satisfy current
corrective
obligations and the
action.

18. company specific or industry specific risk:

A non of the above B unsystematic risk

C systematic risk D portfolio risk

19. the example of systematic risk, except:

A business specific risk B inflation risk

C interest risk D market risk

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12/6/22, 4:52 PM Corporate Finance

20. all the statements are correct regarding hedging except:

The treasurer can use forward contracts to

A B The costs of hedging are not large
hedge

if the forward rate is equal to the expected

C all the above D
spot, the costs of hedging are negligible

21. the sale (purchase) of a foreign currency with a simultaneous agreement to repurchase
(resell) it some time in the future.

A Spot B Future

C Forward D SWAP

22. SPOT involve an agreement on the exchange rate today for settlement in two days

A True B False

23. Earning growth is a bad reason for MERGER

A True B False

24. The firm turns a division into a separate entity and then sells shares in the division to the
public is carve out.

A False B True

25. The difference between the sale price and the repurchase price is called the swap rate

A True B False

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12/6/22, 4:52 PM Corporate Finance

Kunci jawaban

1.e 2.c 3.b 4.a

5.e 6.a 7.c 8.a

9.a 10.a 11.e 12.b

13.b 14.a 15.d 16.b

17.c 18.b 19.a 20.c

21.d 22.a 23.a 24.b

25.a

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