**3. In the mid-1960s, physical persons held as much as 84% of all publicly listed stocks in the United States. These relationships are not too far-fetched. Find a 90% confidence interval for the slope of the population regression line. Following is a list of transactions and events that may occur in private, not-for-profit entities. Jury's dividend growth rate is 8%, and. stockholders have the same liability as members of a partnership.C. A popular anti-trust movement successfully defeated corporate trusts once in the U.S., so there is hope that meaningful action against resurgent monopolists is possible. $$ For example, there is substantial common ownership among U.S. airlines. **11. b. What lesson can you draw from this? T/F, Financial management requires both short-term activities as well as long-term planning such as raising funds. The result is executive compensation being based more on the performance of a firms total industry rather than the firm itself. Corporate governance issues have become less important to the financial community during the first decade of the new millennium. T/F, The higher the profit of a firm, the higher the value the firm is in the market. C. created more pressure on public companies to manage their firms more efficiently. Source: elik, S. and M. Isaksson (2013), Institutional Investors as Owners: Who Are They and What Do They Do? OECD Corporate Governance Working Papers, No. But it is impossibleto have complete portfolio diversification, shareholder representation, and competition. A financial manager's goal of maximizing current or short-term earnings may not be, 81. What is important for competition is therefore the relative influencehorizontal shareholders have on a firm compared to other owners that are more incentivized to increase that firms profits because they are not also invested in competing firms. The performances of public bus depots in India were evaluated and ranked in the International Journal of Engineering Science and Technology (February 2011). Before that, from 1900 to 1945, the proportion of equities managed by institutional investors hovered around 5%. How sensitive to fuel prices is this capital investment? The rise and consolidation of intermediated asset managementincreases the shareholder power of large diversified owners and reduces portfolio firms competitive incentives. T/F, A corporation must have more than 100 stockholders to qualify for Subchapter S designation. **2. 77.The increasing percentage ownership of public corporations by institutional investors has A.had no effect on corporate management. Institutional investors also have significantly higher voting participation rates, casting votes that represent 91 percent of the shares that they hold compared with only 29 percent for retail investors. previous. Defining the role of institutional shareholders depends on whether the shareholders contribute capital, information, and monitoring, or whether they only contribute capital. There is a lot of buzz around the topic of institutional investor engagement in Asia. Horizontal shareholding clearly has negative consequences for competition. Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the White note. \text{ expenditure (\\\%) } The Sarbanes-Oxley Act set up the Public Company Accounting Oversight Board with the responsibility for all of the following except, Net worth is equal to stockholders' equity. **Answer** 15 Apr 2014, Padma If he can cut fuel consumption by 15 percent, he will save $\$ 1,875,000$ per year $(1,500,000$ gallons times $\$ 1.25)$. \hline \text { January } & \$ 2,000,000 \\ **13. Assume that the indirect method of reporting operating activities is used. If this is true, then fuel efficiency would save more money as the price of diesel fuel rises (at $\$ 1.35$ per gallon, he would save $\$ 2,025,000$ in total if he buys the new trucks). More worrying is the unintentional collusion through the owners corporate governance communications, the information flows between the firms and owners, and the incentives to lessen competition that common ownership brings, without any coordination or communications among the ostensibly competing firms. A Just-In-Time (JIT) inventory management program has all but which of the following requirements? Similarly, common ownership among banksin a particular county is associated with higher fees and lower deposit interest rates. Question: The increasing percentage ownership of public corporations by institutional investors has Select one: a. had no effect on corporate management. The higher the interest rate used in determining the future value of a $1 annuity, A dollar today is worth more than a dollar to be received in the future because. The method of bond repayment where debt is converted to shares of common stock in the company is called: Firms generally decide to call their bonds when interest rates: The current yield on a bond worth $900 with a par value of $1,000 and a coupon rate of 10% is: An increasing proportion of shares in the U.S. are owned by, A rights offer made to existing shareholders with the sole purpose of making it more difficult for another firm to acquire the company is called, Preferred stock may be good for a company because it, The par value on a preferred stock entitles the holder to. The general public, who are usually individual investors, hold a substantial 59% stake in Lonza Group . Do you need an answer to a question different from the above? Horizontal shareholding does not result in increased efficiencies to firms, unlike standard mergers, because operations are not combined to create economies of scale. created more pressure on public companies to manage their firms more efficiently. Under which of the following conditions could the overuse of financial leverage be detrimental to the firm? Increased horizontal shareholding between an incumbent pharmaceutical brand and a genericentering its market made it 12% more likely that the firms would agree to pay the generic firm to stay out of the market, which led to higher returns for the incumbent because prices remained high. Which of the following is not true about leverage? A hospital recorded depreciation expense for the year of $50,000. Mr. Hoffman, the president, had found that the company uses an average of 10 million gallons of diesel fuel per year at a price of $\$ 1.25$ per gallon. Which of the following would indicate an accurate statement of cash flows? Homestead Jeans Co. has an annual plant capacity of 65,000 units, and current production of 45,000 units. Hedge funds don't have many shares in AMMO. The internationalization of the financial markets has allowed firms such as McDonald's to raise capital around the world. If a firm has a price $6.00, a variable cost per unit of $4.00, and fixed costs are equal to $151,700, the break-even point is _____ units. Meanwhile, the second and third largest shareholders, hold 6 . A. increased earnings is of primary importance. The valuation of a financial asset is based on the concept of determining the present value of future cash flows. Institutional ownership is significant; the mean value of percentage ownership averaging across all firms in all years is 59.4% of the outstanding shares in each firm. D. taken away the voice of the individual investor. Theory and evidence suggests that horizontal shareholding harms competition, consumers, and the economy. Nov. 1 Accepted a $\$ 6,000,180$-day, $8 \%$ note dated November 1 from Kelly White in granting a time extension on her past-due account receivable. \begin{array}{lr} The combination of these factors gives institutional investors a disproportionately large influence over voting outcomes. Section 13(d) of the 1934 Act and Regulation 13D thereunder require beneficial owners of more than 5% of a class of equity securities of a publicly traded company to file a report with the SEC. Theory and evidence suggests that horizontal shareholding harms competition, consumers, and the economy. **3. With a Subchapter S corporation A. income is taxed as direct income to stockholders.B. The following chart shows by just how much common ownership has increased in U.S. industries between 1994 and 2013. General Public Ownership. When a corporation uses the financial markets to raise new funds, the sale of securities is made in the For a given level of profitability as measured by profit margin, the firm's return on equity will, A decreasing average collection period could be associated with (select the one best answer), Total asset turnover indicates the firm's, A quick ratio that is much smaller than the current ratio reflects. The increasing percentage ownership of public corporations byinstitutional investors has. **7. C The increasing percentage ownership of public corporations by institutional investors has A. had no effect on corporate management.B. But do the damages reach further? B. created higher returns for the stock market in general. b. created higher returns for the stock market in general. C. The _ __ is the major device for measuring the profitability of a firm over a period of time. **14. These funds could still offer diverse investment portfolios, but only across industries rather than across competing firms in an industry. Insider trading occurs when. ** How much are total expenses for Research In Motion for the year ended February 27, 2010? Several policies have been proposed to counteract the harms of horizontal shareholdings. MLB player Walter Johnson signs a contract calling for payments of $250,000 per year, to begin 10 years from now and then continue for five more years. Moreover, proxy advisory firms lessen the effort that index funds need to exert by providing them with company research and vote administration services, and even guiding their voting. The increasing percentage ownership of public corporations by institutional investors has created more pressure on public companies to manage their firms more efficiently. These features and choices are then used to establish taxonomy for identifying different degrees of ownership engagement ranging from no engagement to inside engagement.. Mr. Hoffman assumed that the price of diesel fuel is an external market force that he cannot control and that any increased costs of fuel will be passed on to the shipper through higher rates endorsed by the Interstate Commerce Commission. ___ is a particularly important consideration in financial decisions. B. created higher returns for the stock market in general. Firms with an expectation for great potential tend to trade at low P/E ratios. Venkat Otherwise, any profits they gain from one firm will be roughly matched by losses at its competitors. Interest expense is deductible before taxes and therefore has an after-tax cost equal to the interest paid times (1 - tax rate). Fears of the economic, political, and social harms of concentrated economic power have been narrowed in anti-trust jurisprudence to questions about how consumers are affected. Which of the following is NOT a method for lenders to control pledged inventory? The benefits from common ownership are to stockowners and to investment funds. Select annual returns on a stock market index over 14 years from, C gold becomes more liquid D stock prices are expected to fall, A crystalline solid consists of atoms stacked up in a repeating lattice, Suppose that among people randomized to lutein tablets, at a 4-month follow-up, Compute cash flows from investing activities using the following company information.Sale of, The manager of a mining company is planning to invest in a, People have different styles of learning. Large-scale corporate engagement is still a relatively new phenomenon for many institutional investors. 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