As a means of protecting their company positions, a company may adopt a poison pill device that makes it nearly impossible for another ﬁrm to take control of the ﬁrm without the consent of the:
A) Vast majority of the shareholders of the target ﬁrm.
B) OSC and CRA.
C) Management of the target ﬁrm.
D) Majority of the shareholders of both the target ﬁrm and the acquiring ﬁrm.
E) Total shareholders of the target ﬁrm.

Question

Quizplus · Accepted Answer

The poison pill device is a defensive strategy adopted by a company to make it difficult for another firm to take control of the company. It is achieved by making the target firm less attractive to the acquiring firm. The management of the target firm is responsible for implementing this device, which means they have the power to decide whether to sell the company or not. Therefore, the consent of the management of the target firm is required for the acquiring company to take control.

As a Means of Protecting Their Company Positions, a Company