The Essays of Warren Buffett: Lessons for Corporate America Test | Final Test - Easy

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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. Pooling overcame the deficiency of ____________ amortization in a merger, which was really a purchase.
(a) Peaceful.
(b) Projected.
(c) Promised.
(d) Goodwill.

2. Berkshire's consolidated statements met outside __________, according to the book.
(a) Movements.
(b) Standards.
(c) Values.
(d) Requirements.

3. Buffett and Munger did not operate a strategic plan for __________ but compare opportunities against passive investments.
(a) Stockholders.
(b) Reports.
(c) Acquisitions.
(d) Buyouts.

4. All acquisition considerations were paid for in ________, according to the book's information.
(a) Stocks.
(b) Cash.
(c) Trades.
(d) Handshakes.

5. Buffett proposed that earnings should be retained to the extent each retained dollar creates at least ________ of market value for owners.
(a) Five dollars.
(b) Twenty dollars.
(c) Ten dollars.
(d) One dollar.

6. What is NOT one of the three excuses often given by an overpaying buyer, according to the book?
(a) Will be worth more in the future.
(b) The buyer must grow.
(c) Will be worth less in the future.
(d) Buyer's stock is undervalued.

7. The benefits of __________ were retained by Berkshire since it was a strong franchise.
(a) Tax reduction.
(b) Reporting.
(c) Fair market value.
(d) Shareholder meetings.

8. A purchased firm might have _______ that increases in value over time by the amount of inflation and successful operating results.
(a) Economic goodwill.
(b) Operating goodwill.
(c) Money goodwill.
(d) Stock goodwill.

9. Buffett and Munger promise to never ________ unless they are selling at a market price well below intrinsic business value.
(a) Liquidate assets.
(b) Repurchase shares.
(c) Exchange shares.
(d) Lower dividends.

10. What was NOT one of the three tax-free gifting tactics that Buffett suggested to shareholders?
(a) Married couple gifting.
(b) Will gifting.
(c) Bargain sale.
(d) Partnership form.

11. _________ was spurious, to Buffett, compared to depreciation charges for deteriorating assets.
(a) Amortization.
(b) Stock market value.
(c) Annual reporting.
(d) Acquisition investment.

12. While Munger and Buffett were excited when they are in the process of acquiring a new business, they were also _________.
(a) Complacent.
(b) Bored.
(c) Unhurried.
(d) Rational.

13. Buffett stated that his position with any stock repurchase does not imply acceptance of _______, which he calls extortion.
(a) Blackmail.
(b) Blue chip mail.
(c) Redmail.
(d) Greenmail.

14. During what year were the Berkshire shares to be traded on the New York Stock Exchange?
(a) 1988.
(b) 1999.
(c) 1986.
(d) 1975.

15. Buffett preferred to trade a narrow range around _________ business value to favor long-term owners.
(a) Market.
(b) Guesstimated.
(c) Intrinsic.
(d) Promised.

Short Answer Questions

1. Buffett and Munger continue to offer _______ for value trade in the acquisition process, as it seems fair to all parties.

2. A stock _______ might attractive investors unlike their current investor group which might downgrade the quality of the shares.

3. What kind of pro told Buffett the piece of information that helped to guide them on the field?

4. ___________ were used to pay salaries and wages, which eliminated payroll with increased employee compensation.

5. Whose approach did other companies try to use in order to emulate Berkshire?

(see the answer keys)

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