Which one of the following statements is TRUE?
A) A targeted share repurchase is when the company purchases stock from one shareholder at a higher price than it offers to other shareholders.
B) An example of asset switching is an option to exchange one piece of real estate for another.
C) A shareholder-friendly charter will make it harder for a company to be acquired.
D) A targeted share repurchase can be used to encourage a hostile takeover.
E) Anti-takeover charter provisions are good for shareholders because they prevent a raider from stealing the company for a below-market price.

Question

Quizplus · Accepted Answer

A targeted share repurchase, also known as a "greenmail," is a strategy where a company buys back shares from a specific shareholder, often at a premium, to fend off a hostile takeover attempt or to buy out an unwanted or troublesome shareholder. This action is typically not offered to all shareholders, making the statement true.

Which One of the Following Statements Is TRUE