Which one of the following statements is TRUE?
A) A targeted share repurchase can be used to prevent a hostile takeover.
B) A targeted share repurchase can be used to increase the stock price if the company is undervalued.
C) Anti-takeover charter provisions are good for shareholders because they prevent a raider from stealing the company for a below-market price.
D) Shareholders want to prevent takeovers because they don't want the company purchased out from under them.
E) One tool of corporate governance is choosing a good investment banker.

Question

Quizplus · Accepted Answer

A targeted share repurchase, also known as a "greenmail," can be used to prevent a hostile takeover by buying back shares from a potential acquirer at a premium, thus reducing their influence.

Which One of the Following Statements Is TRUE