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?

Question

Quizplus · Accepted Answer

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.

Big City Financial Is Allowing Stockholders to Purchase More Shares