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This quiz consists of 5 multiple choice and 5 short answer questions through Part 3: Chapter 15, Boesky Day.

Multiple Choice Questions

1. 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

2. Who was James Grant?
(a) the author of the Grant Bill in Congress
(b) the head of Grant Investment Bank
(c) the chief of the SEC
(d) the editor of Grant's Interest Rate Observer

3. Why did people like Lawrence Coss of Green Tee Acceptance feel they were targets of hostile takeovers?
(a) because Milken did not like them
(b) because they wanted more money for their companies
(c) because they were not Jewish
(d) because they wouldn't give in to Milken

4. How did Milken decide to help Peltz?
(a) by loaning him $10 million from his personal fortune
(b) by underwriting $100 million in junk bonds for Triangle
(c) by making him a partner in his bond business
(d) by advision him how to avoid bankruptcy

5. What do raiders look for in companies to take over?
(a) public good will, which continues after the takeover
(b) companies saddled with heavy debt
(c) cash flow, which is one of the most important items in LBOs
(d) new research and development projects

Short Answer Questions

1. What did Milken offer this market segment?

2. How much money and how fast did Drexel raise for the Phillips Petroleum proxy fight?

3. What is it called when a firm decides to commit its own capital toward a takeover?

4. By 1983, what was the worth of Drexel's junk bond business?

5. What did the Revlon takeover prove?

(see the answer key)

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