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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. What was Perelman planning to do when he took over Pantry Pride in 1985?
(a) to create positions for his sons and other family members.
(b) to use Pantry Pride and its income sheltering tax loss to acquire Revlon
(c) to run the business and get out of doing takeovers
(d) to make Pantry Pride attractive to other supermarkets

2. What was coming to an end?
(a) Drexel's presence on Wall Street
(b) Drexel's plans for selling the firm
(c) Milken's ability to raise millions of dollars in a few days
(d) Milken's anonymity

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

4. What was another company Wedvick used in his investment scheme?
(a) Barzil International Insurance
(b) Caribbean Investment Corporation
(c) Kansa General Insurance Company in Helsinki, Finland
(d) Banco de Mexico

5. What were many of the money managers who started with Milken in the late 1970s doing in the 1980s?
(a) staying with Milken because he was the best
(b) running their own funds
(c) creating new ways of financing takeovers
(d) retiring and taking extended vacations

6. Why was the partner Groupe Bruxelles Lambert S.A. not happy with Drexel and trying to take it over?
(a) the falling stock price of drexel
(b) Drexel's secret bookkeeping
(c) the Drexel continued support of Mike Milken
(d) the Drexel practice of not paying dividends

7. What indicated the level of fear at Drexel during the investigations?
(a) All bonuses were cancelled.
(b) Drexel began firing employees.
(c) Many employees were leaving the firm.
(d) Joseph resigned as CEO.

8. How did Milken's unit function within the larger firm?
(a) as an integrated member of the firm
(b) as the firm's banker
(c) as a separate firm within Drexel
(d) as a front for other Drexel activities

9. How was Drexel being spoken of after the success of so many hostile takeovers?
(a) as the devil in disguise
(b) a god that could do whatever it wanted in the niche it was in
(c) as near criminals skirting the law
(d) as the investment firm of the future

10. What did Bergerac and his allies forget in the process of fighting the takeover?
(a) That the courts could prevent them from offering a management contract.
(b) That Perelman had Minken behind him.
(c) The large cash bids by Pereleman would benefit the shareholders.
(d) The company was failing during that time.

11. On May 12, 1986, who was charged with insider trading and agreed to cooperate with the government?
(a) Dennis Levine
(b) Car Icahn
(c) Fred Joseph
(d) Lowell Milken

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

13. What could happen to Drexel with so much power vested in one man?
(a) possible collapse of the company
(b) possible abuse of power
(c) possible loss if anything happened to him
(d) possible take over of the company

14. Who were the people Milken was happy to help in the business?
(a) people who would destroy competitors
(b) people who would spy on the competition
(c) people who left Drexel on friendly terms
(d) people who did not qualify to work at Drexel

15. Who paid $2-billion for the Metromedia television stations and their assets?
(a) Bill Gates
(b) Time-Warner
(c) Ted Turner
(d) Rupert Murdock

Short Answer Questions

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

2. Who told Perelman that Revlon was not for sale?

3. In what was Atlantic Capital involved?

4. What was the result when many Drexel employees were not allowed into Milken's investment groups?

5. How did Drexel get around the law and continue the takeovers?

(see the answer keys)

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