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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. What was Ichan able to do after he got a seat on the board of Tappan?
(a) He prevented the company from being taken over.
(b) He was able to raise the stock prices.
(c) He maneuvered the sale of the company to AB Electrolux.
(d) He took over running the company.

2. Keeping New York office hours, at what time did they begin work in L. A.?
(a) 10:00 a.m.
(b) 4:30 a.m.
(c) 7:00 a.m.
(d) 6:30 a.m.

3. What did Grant think about the junk bond business?
(a) that junk bonds was the perfect vehicle for M&A
(b) that Wall Street had gone too far with junk bonds
(c) the Wall Street was too slow in accepting them
(d) that it was too heavily regulated

4. What government regulation made it easier for multiple mergers in the 1980s?
(a) cuts in the minimum wage
(b) a relaxation of antitrust restrictions
(c) deregulation of banks
(d) gauranteed loans for mergers

5. What advantage did Milken's kind of debt offer?
(a) It was done under the table so the banks did not know about it.
(b) It was separate from bank loans and the bondholder could sell his bonds whenever he wanted
(c) It did not tie up cash the way loan repayments did.
(d) It was easier to use than getting a bank loan.

Short Answer Questions

1. What did Joseph need to achieve his goal of making Drexel a world-class institution?

2. What was the subject of debate in the mid 1980s during the M&A onslaught?

3. What became the name of bonds that come into being during highly leveraged takeovers?

4. When were the tax laws changed to minimize the benefits of stripping?

5. What was Peer Wedvick devising?

(see the answer key)

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