Which one of the following statements is TRUE?
A) A shareholder rights provision discourages takeovers because the acquiring company will suffer dilution.
B) A company has an interlocking board of directors if the CEO also serves as the chairman of the board of directors.
C) A company whose board members are elected in staggered terms is said to have an interlocking board of directors.
D) Shareholders want to prevent takeovers because they don't want the company purchased out from under them.
E) A classified board is one in which the board members serve anonymously.

Question

Quizplus · Accepted Answer

A shareholder rights provision, often known as a "poison pill," is designed to make a takeover less attractive or more difficult by allowing existing shareholders to purchase additional shares at a discount in the event of a takeover, potentially diluting the shares of a new, acquiring company. This discourages takeovers by making them more expensive and less appealing.

Which One of the Following Statements Is TRUE