Poison pills represent a new class of stock issued by a company to its shareholders, usually as a dividend.

Name: Poison pills represent a new class of stock issued by a company to its shareholders, usually as a dividend.
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Question

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Poison pills are a defensive strategy used by companies to fend off hostile takeovers. When a company issues a new class of stock to its shareholders, typically as a dividend, it dilutes the potential acquirer's share and makes the takeover less attractive or more expensive.

Poison Pills Represent a New Class of Stock Issued by a Company