A ﬁnancial device designed to make unfriendly takeover attempts ﬁnancially unappealing, if not impossible, is called:
A)a golden parachute.
B)a standstill agreement.
C)greenmail.
D)a poison pill.
E)a white knight.

Question

Quizplus · Accepted Answer

A poison pill is a financial device that makes hostile takeover attempts financially unappealing by issuing new shares of stock to existing shareholders at a discounted price in the event of a takeover attempt. This dilutes the value of the company and makes it more expensive for the acquiring company to gain control. The other options (A, B, C, and E) do not specifically address unfriendly takeover attempts.

A ﬁNancial Device Designed to Make Unfriendly Takeover Attempts ﬁNancially