Assume that 20% of the shareholders of ABC Co. are extremely unhappy with the company's management and would like to replace all of the senior executives. To do this, they need control over the board of directors. This situation has a high probability of leading to a:
A) Conglomerate acquisition.
B) Going private transaction.
C) Management buyout.
D) Proxy contest.
E) Pooling of interests.

Question

Quizplus · Accepted Answer

A proxy contest is a situation where a group of shareholders attempts to gain control of the company's board of directors by convincing other shareholders to vote for their proposed slate of directors. In this scenario, the 20% of shareholders unhappy with the company's management would likely engage in a proxy contest to replace the senior executives by gaining control over the board.

Assume That 20% of the Shareholders of ABC Co