lecture 3 (2)

Question 1

Corporate control across the world in UK and US

Answer 1

Very different than rest of the world

Firms are widely held

Institutional shareholders are the main type of owners

More developed stock market

Question 2

Corporate control across the world europe

Answer 2

Ownership concentration is there

Family firms widespread

Bank control is important - as a result of proxy rights

Question 3

Insiders system

Answer 3

Badly performing managers are punished by the insiders (majority/large shareholders)

Question 4

Initial public offerings (IPO)

Answer 4

Firms obtaining a listing on a stock exchange and offering its shares to the general public for the very first time

Question 5

UK vs germany how percentage of equity held by the initial shareholder changes over time

Answer 5

Germany year 1: 73,7%
Germany year 6: 45%

UK year 1: 62,8%
UK year 6: 31,4%

Question 6

blocking minority

Answer 6

the minority needed to veto certain decisions of the extraordinary general meeting of Shareholders

at 25%

Question 7

Simple majority

Answer 7

50%

Decisions on daily operations, investments but not changing the destiny of the firm

Question 8

Supermajority

Answer 8

75%

Make big strategic decisions

Question 9

first tier vs second tier

Answer 9

First tier investors hold a certain percentage of stock

Second tier investors hold a certain percentage of stock of the company holding stock in the original comapny

Question 10

Percentage of listed firms with a shareholder holding a blocking minority Belgum, germany, NL, UK, USA

Answer 10

Belgium: 93%
Germany: 82%
NL: 80%
UK: 16%
USA: 5,2%

Question 11

Summary corporate control in western europa

Answer 11

Majority of votes is held by one shareholder or group of shareholders

Most firms have a shareholder with a blocking minority

The potential conflict of interest is therefore those between the minority shareholders and the large shareholders

Question 12

Summary corporate control in the USA (UK)

Answer 12

Most firms are widely held

A coalition of the three largest shareholders votes for less than 30%

The potential conflict of interest is between the shareholders and the management

so UK and USA suffer from classical P&A problem

Question 13

percentage of listed firms with a 20% shareholder (asia)

Answer 13

japan 27%
Korea 51%
Taiwan 25%
Thailand 51%

Exept japan and taiwan, family ownership play very important role in asia

Question 14

Keiretsu

Answer 14

A group of industrial companies with close ties to a single bank which acts as the principal lender to the group

Question 15

Banks (japan)

Answer 15

The banks usually have ownership of group companies (usually cross holding between the group companies)

Banks are widely held. And these banks hae the ownership of the group companies

Question 16

Chaebolds

Answer 16

A group of industrial companies controlled by a family firm

e.g. samsung, hyundai or LG