______ involve issuing special securities that entitle the holders to unusual rights and privileges if the issuing firm becomes the subject of a takeover bid.
A)Poison pills
B)Tender offers
C)White knights
D)Legal barriers

Question

Quizplus · Accepted Answer

Poison pills are a common defense mechanism used by companies to thwart hostile takeovers. The issuing firm will create special securities that, if triggered by a takeover bid, will give the holders unusual rights and privileges, effectively making the takeover much more expensive and difficult. For example, these securities might give the holder the right to purchase more shares at a discounted price or the right to vote on certain issues. This makes it less attractive for a potential acquiring company to pursue the takeover, as it would become much more expensive and complicated.

______ Involve Issuing Special Securities That Entitle the Holders to Unusual