Asked by Muhammad Haque on Jul 05, 2024
Verified
Big City Financial is allowing stockholders to purchase more shares of stock at prices below the existing market value.This is an attempt to avoid a hostile takeover by a corporate raider.Which of the following methods is being used by Big City Financial to evade the takeover?
A) A compliance buyout
B) A tender offer
C) A class action
D) A poison pill
E) A shark repellant
Hostile Takeover
An acquisition attempt by a company or individual despite resistance or opposition from the target company's management.
- Comprehend the purpose and function of various defensive strategies against hostile takeovers.
Verified Answer
ZK
Zybrea KnightJul 07, 2024
Final Answer :
D
Explanation :
A poison pill strategy allows existing shareholders to purchase additional shares at a discount, diluting the value of shares and making a takeover more expensive and less attractive for the aggressor.
Learning Objectives
- Comprehend the purpose and function of various defensive strategies against hostile takeovers.