An attempt to gain control of a ﬁrm by soliciting a suﬃcient number of equityholder votes to replace the current board of directors is called a:
A)tender offer.
B)proxy contest.
C)going-private transaction.
D)leveraged buyout.
E)consolidation.

Question

Quizplus · Accepted Answer

A tender offer is an attempt to purchase a large amount of the company's shares, while a going-private transaction is an attempt to take the company private. A leveraged buyout involves using debt to finance the purchase of a company, while consolidation involves merging with another company. A proxy contest is the most appropriate answer as it involves soliciting shareholder votes to replace the current board of directors and gain control of the company.

An Attempt to Gain Control of a ﬁRm by Soliciting