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This quiz consists of 5 multiple choice and 5 short answer questions through Part 3: Chapter 14, Sovereign Privileges.

Multiple Choice Questions

1. Who was another player involved in the National Can takeover attempt?
(a) Gerald Guteman
(b) Lowell Milken
(c) Oscar Wyatt
(d) Victor Posner

2. What was Milken's problem with back office people at Drexel?
(a) He was less educated than they were.
(b) He did not understand their work.
(c) He could not communicate with them.
(d) He did not work well with Jewish people.

3. Why did Drexel want Carl Icahn as a client?
(a) Most other firms wouldn't handle him and he would be willing to pay the price to the investors of junk bonds.
(b) Icahn would not use junk bonds to finance his hostile takeovers.
(c) Icahn had liquid capital in offshore banks.
(d) He was a risk taker that would make money even if he failed.

4. How did bondholders often operate in noncompliance with SEC rules?
(a) not declaring income from bond sales
(b) overstating the values of bonds
(c) selling bonds before they were registered
(d) secrecy in the bond market

5. What was the subject of debate in the mid 1980s during the M&A onslaught?
(a) the dangers of over growth
(b) the legality of hostile takeovers
(c) the cash flow of takeovers
(d) the economic advantages of takeovers

Short Answer Questions

1. Why did Ichan and Kingsley limit themselves to 4.9% of shares in companies?

2. What did the 1985 President's Council of Economic Advisers report on the issue of M&A conclude?

3. By 1986, who was the largest stockholder in Drexel Burnham Lambert?

4. Who becomes Milken's ally and public face in 1974?

5. How did the firm now have equity stakes in most of the companies that it financed?

(see the answer key)

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