BUSI 4940 Exam Questions with Correct Answers 100% Verified by Experts|
2025/2026 Latest Update
Corporate governance set of mechanisms used to manage relationships among stakeholders
and determine and control strategic directon and performance
Single Business revenue 95% of a corp's revenue
Dominant business revenue 70-95% of a corp's revenue
Related Constrained Business No one business accounts for more than 70% of the revenue,
but all businesses are linked (ex. BIC)
Related Linked Business No one business accounts for more than 70% of the revenue,
businesses are kind of linked (like if a company made football tailgate supplies)
Unrelated Diversified No one business accounts for more than 70% of the revenue,
businesses do not appear related
Another term for unrelated diversified businesses Conglomerate
3 types of value creating diversification Economies of scope (related)
Market Power (related)
Financial economies (unrelated)
Economies of scope Cost savings that occur when a firm transfers capabilities and
competencies developed in one of its businesses to another of its businesses
What does an economy of scope do spreads cost across businesses or activities
, Market Power Firm can earn above normal economic rates of return due to competitive
advantage
Backwards integration Company expands back towards suppliers
Forwards integration Company expands towards the finished product
Financial economies risk adjusted cost savings realized through improved allocations of
financial resources
Internal Capital Allocations People within the firm redistribute your capital, typically not
successful
External capital market go to banks to redistribute your capital
dominant business, related constrained, conglomerate: which is more likely to rely on internal
capital markets? conglomerate, need value due to no leverage
Value neutral actions goal is to keep you from losing money
Progressive Tax The more you make, the more you pay
Regressive tax The less you make, the more you pay (inflation)
4 terms to describe shareholders owners, common shareholders, principals, residual
claimants
2025/2026 Latest Update
Corporate governance set of mechanisms used to manage relationships among stakeholders
and determine and control strategic directon and performance
Single Business revenue 95% of a corp's revenue
Dominant business revenue 70-95% of a corp's revenue
Related Constrained Business No one business accounts for more than 70% of the revenue,
but all businesses are linked (ex. BIC)
Related Linked Business No one business accounts for more than 70% of the revenue,
businesses are kind of linked (like if a company made football tailgate supplies)
Unrelated Diversified No one business accounts for more than 70% of the revenue,
businesses do not appear related
Another term for unrelated diversified businesses Conglomerate
3 types of value creating diversification Economies of scope (related)
Market Power (related)
Financial economies (unrelated)
Economies of scope Cost savings that occur when a firm transfers capabilities and
competencies developed in one of its businesses to another of its businesses
What does an economy of scope do spreads cost across businesses or activities
, Market Power Firm can earn above normal economic rates of return due to competitive
advantage
Backwards integration Company expands back towards suppliers
Forwards integration Company expands towards the finished product
Financial economies risk adjusted cost savings realized through improved allocations of
financial resources
Internal Capital Allocations People within the firm redistribute your capital, typically not
successful
External capital market go to banks to redistribute your capital
dominant business, related constrained, conglomerate: which is more likely to rely on internal
capital markets? conglomerate, need value due to no leverage
Value neutral actions goal is to keep you from losing money
Progressive Tax The more you make, the more you pay
Regressive tax The less you make, the more you pay (inflation)
4 terms to describe shareholders owners, common shareholders, principals, residual
claimants
