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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. Why did none of the thirty bills introduced covering takeovers in 1984-85 pass?
(a) The Congress did not think it was an important matter.
(b) Many politicians who received large contributions attended the Predators' Ball in 1986.
(c) Congress was waiting for a supreme court decision.
(d) Drexel took leading politicians on a vacation to the Bahamas.

2. By the fall of 1989, what were many people doing?
(a) junk bond financing
(b) complaining about Milken
(c) changing the rules for junk bonds
(d) getting rid of junk bonds

3. How did Perelman acquire Technicolor?
(a) buying on credit
(b) paying full price
(c) selling junk bonds
(d) directing a hostile takeover

4. How was Joseph building his diversified team?
(a) by computerizing his entire operation
(b) by training inexpensive novices to learn the business
(c) by hiring people away from other firms for huge salaries
(d) by taking his time to get the right people together

5. Who told Perelman that Revlon was not for sale?
(a) Michael Bergerac
(b) Carl Icahn
(c) Michael Milken
(d) Tubby Burnham

Short Answer Questions

1. Why did people like Lawrence Coss of Green Tee Acceptance feel they were targets of hostile takeovers?

2. What happened in April of 1987 while the investigation of Milken and Drexel was proceeding?

3. What company did Wedvick find with a high investment-grade rating?

4. Where did Grant point out most of the junk bonds were held?

5. In many ways, what became the role of Milken?

Short Essay Questions

1. What were the results of the ongoing investigations of Drexel and Milken?

2. Why did Milken play the role of enforcer?

3. Describe the attempts to prevent Perelman's acquisition of Revlon.

4. What role did LTV play in identifying a weakness in the junk market?

5. How widespread was Milken's competition by the fall of 1986?

6. What were some of the detractors of LTOs saying about the practice in the 1980s?

7. How and why did Milken avoid personal publicity?

8. What was Ronald Perelman's purpose for acquiring Pantry Pride?

9. What evolved after many customers first dealt with Milken?

10. How did Milken disagree with the idea that liquidity was scarce?

(see the answer keys)

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