How does the market for corporate control work? Provide at least one example. The example can be from your reading in this class, your reading in other classes, or your own experience.
What will be an ideal response?
Student examples will vary. A sample answer follows.
If a company is poorly managed, its performance suffers and its stock price falls as more and more investors sell their shares. Once shares fall to a low enough level, the firm may become the target of a hostile takeover when new bidders believe they can fix the internal problems that are causing the performance decline. For example, Kraft completed a hostile takeover of Cadbury. Besides competitors, so-called corporate raiders (e.g., Carl Icahn and T. Boone Pickens) or private equity firms and hedge funds (e.g., The Blackstone Group and Soros Fund Management) may buy enough shares to exert control over a company.
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Excessive earnings management typically begins as a result of
a. a regulatory investigation. b. pressure to meet the expectations of stakeholders. c. a downturn in business. d. a violation of generally accepted accounting principles.
Compare and contrast the two general types of stress. Include an example of each.
What will be an ideal response?
It is a violation of federal law to sell a pesticide or herbicide that has a chemical strength different from the concentration declared on the label
Indicate whether the statement is true or false
With a single-server model, increasing the service rate while holding all other factors constant will:
A) increase the utilization of the server. B) increase the time spent per customer. C) decrease the probability that there are two customers in the system at any time. D) decrease the arrival rate of customers.