Corporate Finance - Corporate Finance Section 1

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21. The risk committee is least likely to:

  • Option : C
  • Explanation : Monitoring investment is the responsibility of the investment committee.
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22. Which of the following is a form of shareholder activism?

  • Option : C
  • Explanation : Proposing shareholder resolutions is a form of shareholder activism.
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23. Persuading shareholders to vote for a group seeking a controlling position in a company is known as a:

  • Option : A
  • Explanation : In a proxy contest, shareholders are persuaded to vote for a group seeking a controlling position on a company’s board of directors.
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24. Which of the following is not a risk of poor corporate governance?

  • Option : A
  • Explanation : Effective corporate governance ensures control at all corporate levels which can help identify and manage risks at an early stage.
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25. A poor corporate governance structure is most likely to:

  • Option : C
  • Explanation : Poor corporate governance can hinder a company's ability to meet its debt obligations and therefore increase its cost of debt.
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