Poison pill is a takeover defense in which the target firm finds an acquirer more to its liking thanthe initial hostile acquirer and prompts the two to compete to take over the firm.

Question

Quizplus · Accepted Answer

This is not a correct definition of a poison pill defense. A poison pill defense is a strategy used by a company to make its stock less attractive to a potential acquirer in order to prevent a hostile takeover. It often involves creating and issuing new shares of stock to existing shareholders, diluting the value of the acquirer's offer.

Poison Pill Is a Takeover Defense in Which the Target