1. Discuss two generic models that could be applied by managers when facing a strategic dilemma. Explain which approach would be more useful in a particular In your answer define what is meant by a ‘strategic dilemma’, and the basic characteristics of each model. Use examples to illustrate your answer.

The par value on a preferred stock entitles the holder:

A. priority on all cumulative dividends.

B. an established amount of money if the company is liquidated.

C. a minimum amount of convertible common stock.

D. None of the above

2. Which of the following does not represent a tax implication in the bond refunding decision?

A. Call premium

B. Cost savings in lower interest rates

C. Underwriting costs of new issue

D. All of the above have tax implications

3. In the initial stage (Stage I), the corporation

A. has a product yet to be accepted in the marketplace.

B. anticipates rapid growth in sales and earnings.

C. needs all its earnings for reinvestment in new assets.

D. all of the above