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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. What are two other notable takeovers done by Perelman after Revlon?
(a) CPC International and Transworld Corporation
(b) NBC-TV and Hertz Rent a Car
(c) Warner Brothers Studios and Coca Cola
(d) Hearst Corporation and Ford Motor Company

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

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

4. Why was the Technicolor acquisition so successful?
(a) acquiring it at a time when movies were reviving
(b) selling off parts and putting the profits into the main company
(c) selling it to Kodak at a great profit
(d) adding R&D to come up with new products

5. What made a Wickes takeover so attractive to Sanford Sigoloff?
(a) It was emerging from Chapter 11 bankruptcy with a large tax-loss carryforward
(b) Wickes was his mother's maiden name.
(c) It was over valued on the Wall Street Stock Exchange.
(d) It was losing stock value and had few debts.

Short Answer Questions

1. What was beginning to happen during this time?

2. For whose benefit were most of the investment partnerships?

3. Who did Joseph hire with a three-year contract calling for $3 million per year plus extras?

4. Who was James Grant?

5. What did Milken do for people who had worked with him?

Short Essay Questions

1. How did Drexel achieve god-like status with investors?

2. What was James Grant's position on where things would eventually lead in the credit cycle?

3. Describe the reason for Wedvick's problems with Atlantic Capital.

4. Before Revlon, what had been Perelman's biggest success?

5. How did Peer Wedvick satisfy his need for an institution with a high investment-grade rating?

6. Describe Milken's goals for the Asian markets.

7. Why did Milken play the role of enforcer?

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

9. How was favoritism shown at Drexel?

10. How was fear affecting Drexel during the investigations?

(see the answer keys)

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