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. Buffett and Munger believed that marketability and __________ were two terms that increased the likelihood of turnover.
(a) Possibility.
(b) Liquidity.
(c) Fluidity.
(d) Stability.

2. Major business activities grouped together aided _____ by providing data in a more useful form.
(a) Stock prices.
(b) Analysis.
(c) Investments.
(d) Future goal setting.

3. LBO operators benefitted from the use of ________ to reshuffle business, risk little of their own money to gain high fees, etc.
(a) Meetings.
(b) Downsizing.
(c) Reports.
(d) Debt.

4. Buffett and Munger continue to offer _______ for value trade in the acquisition process, as it seems fair to all parties.
(a) Benefit.
(b) Choice.
(c) Value.
(d) Truth.

5. How many shares each did the shareholders of the company have to have in order to be listed on the exchange?
(a) 200.
(b) 100.
(c) 1000.
(d) 500.

6. Berkshire kept the business operating after the acquisition, since it would already have successful ___________.
(a) Debts.
(b) Management.
(c) Practices.
(d) Movement.

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

8. The goal of the partners was to maximize the real economic benefits, not just the number of ___________.
(a) Checks.
(b) Properties.
(c) Shares.
(d) Enterprises.

9. _______ transactions only allowed stock be paid compared to a purchase in which cash or stock and cash or other valuable consideration may be paid.
(a) Moving.
(b) Pooling.
(c) Static.
(d) Dripping.

10. ___________ were used to pay salaries and wages, which eliminated payroll with increased employee compensation.
(a) Option warrants.
(b) Valued shares.
(c) Common stocks.
(d) Increased notes.

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

12. Buffett and Munger recapitalize into Class A and _____ non-voting shares to offer a lower trading price.
(a) C.
(b) B.
(c) D.
(d) E.

13. The partners were committed to providing and presenting a _______ business and ownership philosophy.
(a) Active.
(b) Consistent.
(c) Powerful.
(d) Long-term.

14. Owners were expected to conclude that retained _______ were better left in the corporation for reinvestment at a higher rate than paid out as dividends.
(a) Losses.
(b) Values.
(c) Earnings.
(d) Shares.

15. The common stock par value was reduced to _________, according to the book.
(a) One dime.
(b) One cent.
(c) One quarter.
(d) One dollar.

Short Answer Questions

1. In the past, the distinction between economic and accounting goodwill was insignificant when Buffett sought firms with tangible _______, rather than firms relying on economic goodwill.

2. Information helped investors see the likelihood of a company meeting future __________.

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

4. The question of an exchange of stock arose in 1983 during the merger of Berkshire and ____________.

5. The partners were also interested in firms that had extraordinary ________ talent exhibiting skillful executive achievement.

(see the answer keys)

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