A poison pill defense may be implemented by
A)giving stock away.
B)selling firm assets.
C)issuing rights that allow existing shareholders to buy stock at a bargain price.
D)adding seats to the board of directors.

Question

Quizplus · Accepted Answer

A poison pill defense is a tactic used by companies to make their stocks less attractive to potential acquirers. By issuing rights that allow existing shareholders to buy stock at a bargain price, the company can dilute the value of the shares held by the acquiring company, making it less likely that the acquisition will go through. This makes option C the best choice. Giving stock away (A) or selling firm assets (B) are not common ways of implementing a poison pill defense, and adding seats to the board of directors (D) does not directly affect the value of the company's shares.

A Poison Pill Defense May Be Implemented by