|Name: _________________________||Period: ___________________|
This test consists of 15 multiple choice questions and 5 short answer questions.
Multiple Choice Questions
1. When did the trading of Milken, Icahn, Posner and Boyd Jeffries, as well as others come under investigation?
(a) In late December 1986
(b) Right after the Preditors' Ball in 1987
(c) Long before the SEC began investigating Boesky
(d) Within minutes of the announcement of Boesky's plea bargain
2. What was the largest bankruptcy in 1986?
(c) LTV Corporation
3. Why was the partner Groupe Bruxelles Lambert S.A. not happy with Drexel and trying to take it over?
(a) Drexel's secret bookkeeping
(b) the Drexel continued support of Mike Milken
(c) the falling stock price of drexel
(d) the Drexel practice of not paying dividends
4. What did Grant think about the junk bond business?
(a) that it was too heavily regulated
(b) that junk bonds was the perfect vehicle for M&A
(c) that Wall Street had gone too far with junk bonds
(d) the Wall Street was too slow in accepting them
5. Why was the Revlon takeover a landmark case for Perelman and Drexel?
(a) If Perelman won, it would set the precedent for other such takeovers.
(b) Because of its base of female customers, Revlon was vulnerable to bad publicity.
(c) The most impassioned corporate defenders were united against Milken's onslaught.
(d) This one was almost as large as the Phillips Petroleum takeover.
6. How were some people able to beat Milken on deals?
(a) by using illlegal means
(b) by hiring better salesmen
(c) by offering better prices
(d) by attacking Milken
7. What happened to the blue-chip investors Drexel was trying to attack?
(a) They did not stay with the firm.
(b) They kept coming for Drexel help anyway.
(c) They rallied in support of Drexel.
(d) They took a wait and see stance.
8. What was Peer Wedvick devising?
(a) money laundering
(b) a scheme to sell contracts involving housing funds
(c) buying commercial paper
(d) flipping houses and commercial buildings
9. Why did none of the thirty bills introduced covering takeovers in 1984-85 pass?
(a) Drexel took leading politicians on a vacation to the Bahamas.
(b) The Congress did not think it was an important matter.
(c) Congress was waiting for a supreme court decision.
(d) Many politicians who received large contributions attended the Predators' Ball in 1986.
10. Where was most of Drexel's money made through investment partnerships?
(a) in Paris
(b) in Tokyo
(c) in Beverly Hills
(d) in New York
11. What was the subject of debate in the mid 1980s during the M&A onslaught?
(a) the cash flow of takeovers
(b) the legality of hostile takeovers
(c) the dangers of over growth
(d) the economic advantages of takeovers
12. Why did the LTV situation not affect Drexel?
(a) Drexel pointed out the way LTV misused junk bonds.
(b) Drexel used its own money to secure the LTV bonds.
(c) The thrifts that collapsed and the defaults that occurred were not among Milken's customers
(d) Drexel engineered a second buyout of LTV.
13. How did Milken's unit function within the larger firm?
(a) as the firm's banker
(b) as an integrated member of the firm
(c) as a front for other Drexel activities
(d) as a separate firm within Drexel
14. Who did Joseph hire with a three-year contract calling for $3 million per year plus extras?
(a) Antonio Gebauer
(b) Robert Salsbury
(c) Martin Siegel
(d) Dennis Levine
15. Why did Atlantic Capital have to stop selling Wedvick's contracts?
(a) It became over-extended and faced bankruptcy.
(b) Wedvick's contracts became worthless.
(c) Pressure on Kansa came from Standard and Poor's and a downgrade to an A-rating.
(d) Drexel bought them out.
Short Answer Questions
1. When did Drexel begin dealing based on insider information?
2. In what was Atlantic Capital involved?
3. What was beginning to happen during this time?
4. On May 12, 1986, who was charged with insider trading and agreed to cooperate with the government?
5. What had been Perelman's greatest acquisition before Revlon?
This section contains 668 words
(approx. 3 pages at 300 words per page)