The payments made by a ﬁrm to repurchase shares of its outstanding stock from an individual investor in an attempt to eliminate a potential unfriendly takeover attempt are referred to as:
A) A golden parachute.
B) Standstill payments.
C) Greenmail.
D) A poison pill.
E) A white knight.

Question

Quizplus · Accepted Answer

Greenmail refers to the payments made by a firm to repurchase shares of its outstanding stock from an individual investor in an attempt to eliminate a potential hostile takeover attempt. Greenmail is often a defensive measure employed by a firm to ward off hostile takeovers.

The Payments Made by a ﬁRm to Repurchase Shares of Its