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

Multiple Choice Questions

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

2. What company did Wedvick find with a high investment-grade rating?
(a) Drexel
(b) Mutual of Omaha
(c) Clarendon, a Bermuda based reinsurance company
(d) Standard and Poors

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

4. Why were Milken's imitators not as successful as he was?
(a) They could not raise the money Milken could or with the same speed.
(b) They could not invest as much firm money.
(c) They were bound by deeper government regulations.
(d) They had no idea how he was doing his business.

5. For whose benefit were most of the investment partnerships?
(a) for the corporate employees
(b) for the Drexel firm
(c) for potential clients
(d) for Milken

6. Why did Drexel become the target of both an SEC and federal grand jury investigations?
(a) Milken and Drexel refused to cooperate with the investigation.
(b) Milken and Drexel began making off-shore deposits.
(c) Milken and Drexel had underwritten quite a bit of Boesky debt.
(d) Milken and Drexel immediately hired high powered lawyers.

7. Why was the Revlon takeover a landmark case for Perelman and Drexel?
(a) The most impassioned corporate defenders were united against Milken's onslaught.
(b) This one was almost as large as the Phillips Petroleum takeover.
(c) Because of its base of female customers, Revlon was vulnerable to bad publicity.
(d) If Perelman won, it would set the precedent for other such takeovers.

8. Who at Drexel became a problem because of a lawsuit by Beverly Hills Savings and Loan?
(a) Martin Siegel
(b) Fred Joseph
(c) Carl Ichan
(d) Jim Dahl

9. Who were some customers who received better deals from Milken?
(a) Oscar Wyatt and Coastal Corporation
(b) Carl Icahn and Samuel Heyman
(c) Murdock and Turner
(d) Perelman and Rocho

10. Who did Joseph hire with a three-year contract calling for $3 million per year plus extras?
(a) Robert Salsbury
(b) Antonio Gebauer
(c) Martin Siegel
(d) Dennis Levine

11. For what did Boesky claim a $5.3 million payment was made to Drexel?
(a) consulting
(b) investing in Drexel
(c) buying back bonds
(d) a loan to Drexel

12. What was beginning to happen during this time?
(a) Unemployment shot up as a results of the mergers and acquisitions.
(b) Junk bonds began to disappear from the market.
(c) People were making vast amounts of money trading junk bonds.
(d) Junk bonds were becoming poorer in quality and there were more bankruptcies and defaults

13. Who was James Grant?
(a) the author of the Grant Bill in Congress
(b) the head of Grant Investment Bank
(c) the editor of Grant's Interest Rate Observer
(d) the chief of the SEC

14. What was the largest bankruptcy in 1986?
(a) Metromedia
(b) LTV Corporation
(c) TWA
(d) Revlon

15. Why did Milken hold a mini-Predators' Ball in Tokyo?
(a) He was invited by Japanese businessmen.
(b) He did things like that on a whim.
(c) He was looking at getting into foreign markets.
(d) The Balls in Los Angeles were drawing too much publicity.

Short Answer Questions

1. Why was Revlon attracting raiders?

2. What did the Revlon takeover prove?

3. What was the subject of debate in the mid 1980s during the M&A onslaught?

4. How did Milken's unit function within the larger firm?

5. What had been Perelman's greatest acquisition before Revlon?

(see the answer keys)

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