MIE 201 CORE EXAM SET 2026/2027 QUESTIONS AND
SOLUTIONS RATED A+
✔✔outside directors - ✔✔board members who are not employees of the firm, but who
are frequently senior executives from other firms or full-time professionals
✔✔where does the center of power lie within a corporation - ✔✔- the CEO or chief
executive officer
- with the help of the other C-level officers
✔✔shareholders commitments in a corporation - ✔✔- annual meetings where they
discuss the years results and plans for the next year
- those who cannot attend send a proxy in their place to vote for them
- shareholder activism is when they pressure management on matters ranging a wide
variety relating to the overall company performance
✔✔board issues - ✔✔- composition
- education
- liability
- independent board chairs
- recruiting challenges
✔✔education - ✔✔- board members are expected to understand everything from
government regulation t financial management to executive compensation strategies in
addition to the inner working of the corporation itself
✔✔board chair - ✔✔- oversees the board of directors who are supposed to oversee the
corporate officers who make up the top management team while the CEO oversees the
management team
✔✔CEO - ✔✔- chief executive officer
✔✔CFO - ✔✔- chief financial officer
✔✔CIO - ✔✔- chief information officer
✔✔CTO - ✔✔- chief technology officer
✔✔COO - ✔✔- chief operating officer
✔✔business combinations - ✔✔- mergers
- acquisitions
- leveraged buyouts
- hostile takeovers
, - consolidation
✔✔mergers - ✔✔- 2 companies join together to form a single entity
- companies can merge by either pooling their resources or through a purchase of the
assets of one company by the other
ex: Disney-Pixar
ex: SiriusXM
✔✔consolidation - ✔✔- two companies create a new third entity that then purchases the
two original companies
✔✔acquisition - ✔✔- one company simply buys a controlling interest in the voting stock
of another company
ex: Amazon buys Whole Foods
ex: Micheal Kors buys Jimmy Choo
✔✔cooperative - ✔✔an organization composed of individuals that have banded
together to reap the benefits of belonging to a larger organization
✔✔hostile takeovers - ✔✔- the buyer tries to convince enough shareholders to go
against management and vote to sell
- acquisition of another company against the wishes of management
ex: AOL and Time Warner
✔✔leveraged buyout - ✔✔- one or more individuals purchase a company's publicly
traded stock by using borrowed funds
- usually with the intent of using some of the acquired assets to pay back the loans used
to acquire the company
ex: Blackstone Group buys Hilton Hotels
✔✔hostile takeover types - ✔✔- tender offer
- proxy fight
✔✔tender offer - ✔✔- the raider offers to buy a certain number of shares of stock in the
corporation at a specific price (generally more than the current stock price so
shareholders are more motivated to sell)
- the raider hopes to get enough shares to take control of the corporation and to replace
the existing board of directors and management
✔✔proxy fight - ✔✔- the raider launches a public relations battle for shareholders votes
hoping to enlist enough votes to oust the board and management
✔✔techniques to prevent hostile takeovers - ✔✔- poison pill
- shark repellent
- white knight
SOLUTIONS RATED A+
✔✔outside directors - ✔✔board members who are not employees of the firm, but who
are frequently senior executives from other firms or full-time professionals
✔✔where does the center of power lie within a corporation - ✔✔- the CEO or chief
executive officer
- with the help of the other C-level officers
✔✔shareholders commitments in a corporation - ✔✔- annual meetings where they
discuss the years results and plans for the next year
- those who cannot attend send a proxy in their place to vote for them
- shareholder activism is when they pressure management on matters ranging a wide
variety relating to the overall company performance
✔✔board issues - ✔✔- composition
- education
- liability
- independent board chairs
- recruiting challenges
✔✔education - ✔✔- board members are expected to understand everything from
government regulation t financial management to executive compensation strategies in
addition to the inner working of the corporation itself
✔✔board chair - ✔✔- oversees the board of directors who are supposed to oversee the
corporate officers who make up the top management team while the CEO oversees the
management team
✔✔CEO - ✔✔- chief executive officer
✔✔CFO - ✔✔- chief financial officer
✔✔CIO - ✔✔- chief information officer
✔✔CTO - ✔✔- chief technology officer
✔✔COO - ✔✔- chief operating officer
✔✔business combinations - ✔✔- mergers
- acquisitions
- leveraged buyouts
- hostile takeovers
, - consolidation
✔✔mergers - ✔✔- 2 companies join together to form a single entity
- companies can merge by either pooling their resources or through a purchase of the
assets of one company by the other
ex: Disney-Pixar
ex: SiriusXM
✔✔consolidation - ✔✔- two companies create a new third entity that then purchases the
two original companies
✔✔acquisition - ✔✔- one company simply buys a controlling interest in the voting stock
of another company
ex: Amazon buys Whole Foods
ex: Micheal Kors buys Jimmy Choo
✔✔cooperative - ✔✔an organization composed of individuals that have banded
together to reap the benefits of belonging to a larger organization
✔✔hostile takeovers - ✔✔- the buyer tries to convince enough shareholders to go
against management and vote to sell
- acquisition of another company against the wishes of management
ex: AOL and Time Warner
✔✔leveraged buyout - ✔✔- one or more individuals purchase a company's publicly
traded stock by using borrowed funds
- usually with the intent of using some of the acquired assets to pay back the loans used
to acquire the company
ex: Blackstone Group buys Hilton Hotels
✔✔hostile takeover types - ✔✔- tender offer
- proxy fight
✔✔tender offer - ✔✔- the raider offers to buy a certain number of shares of stock in the
corporation at a specific price (generally more than the current stock price so
shareholders are more motivated to sell)
- the raider hopes to get enough shares to take control of the corporation and to replace
the existing board of directors and management
✔✔proxy fight - ✔✔- the raider launches a public relations battle for shareholders votes
hoping to enlist enough votes to oust the board and management
✔✔techniques to prevent hostile takeovers - ✔✔- poison pill
- shark repellent
- white knight
