Corporate charter provisions allowing existing shareholders to purchase stock at some fixed price in the event of a hostile outside takeover attempt are called ___________________.
A) Pac-man defenses.
B) Shark repellent plans.
C) Golden parachute provisions.
D) Greenmail provisions.
E) Share rights plans.

Question

Quizplus · Accepted Answer

Share rights plans, also known as "poison pills," are designed to dilute the holdings of a potential acquirer by allowing existing shareholders to purchase additional shares at a discount, making a takeover more expensive and less attractive.

Corporate Charter Provisions Allowing Existing Shareholders to Purchase Stock at Some