Which of the following describes a plan set up by ABC Company whereby its other shareholders may purchase shares of ABC stock at a significantly reduced price if any individual or entity obtains a majority of ABC Company's stock?
A) Protection method
B) Beachhead defense
C) Poison pill
D) Exchange offer
E) Chose in action

Question

Quizplus · Accepted Answer

The correct term for a strategy where existing shareholders have the right to buy more shares at a discount to prevent a takeover is known as a "poison pill." This makes the takeover less attractive or more difficult for the acquiring party.

Which of the Following Describes a Plan Set Up by ABC