The Golden Parachute is used to discourage a takeover of the firm,because the cost of the takeover becomes much higher due to the high payout to these executives.

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The Golden Parachute is a type of compensation agreement between a company and its key executives, which provides them with substantial financial benefits if the company is acquired or undergoes a change in management. This is done to incentivize these executives to remain loyal to the company and to discourage takeovers by increasing the cost of the transaction.

The Golden Parachute Is Used to Discourage a Takeover of the Firm,because