A firm seeking a friendly acquirer to avoid a hostile takeover is in need of a:
A)Golden parachute
B)White knight
C)Poison pill
D)LBO (Leveraged buy-out)

Question

Quizplus · Accepted Answer

A white knight is a friendly third party who has been sought out by a company in order to avoid a hostile takeover. A golden parachute is a contract clause that guarantees high compensation to top executives if the company is taken over. A poison pill is a strategy that makes the company less attractive to a potential acquirer by making the acquisition too expensive or difficult. An LBO is a type of acquisition where a company is purchased with a significant amount of borrowed money. None of these options specifically fit the requirement of seeking a friendly acquirer.

A Firm Seeking a Friendly Acquirer to Avoid a Hostile