The Foreign Corrupt Practices Act (FCPA)

question 34

Multiple Choice

The Foreign Corrupt Practices Act (FCPA) :

• A) can fine individuals up to $2 million and five years in prison for violations of the law's bribery provisions.
• B) makes it a criminal rather than a civil offense to bribe an official of a foreign government.
• C) makes it legal for bribes paid by managers of one corporation to managers of another.
• D) contains an exception for facilitating payments intended only to restrict "routine governmental action."

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Definitions:

CAPM

The Capital Asset Pricing Model, an investment theory that shows the relationship between the expected return of an investment and market risk.

Cost of Equity

The cost of equity represents the return a firm is expected to pay to its shareholders to compensate them for their investment risk.

DCF Model

DCF Model, or Discounted Cash Flow Model, is a valuation method used to estimate the value of an investment based on its expected future cash flows.

Risk Premium

The extra return expected by investors for taking on additional risk above the risk-free rate.