What is greenmail?
A)a takeover defense in which the target buys back the shark's stock at a premium price
B)a takeover defense where the target sells off the assets that the takeover company most wants
C)a takeover strategy in which one company buys stock from the shareholders of the target firm
D)a takeover defense where the target effectively limits how large a block of stock an investor can buy

Question

What is greenmail?
A)a takeover defense in which the target buys back the shark's stock at a premium price
B)a takeover defense where the target sells off the assets that the takeover company most wants
C)a takeover strategy in which one company buys stock from the shareholders of the target firm
D)a takeover defense where the target effectively limits how large a block of stock an investor can buy

Quizplus · Accepted Answer

Greenmail is a takeover defense strategy where the target company buys back the acquirer's shares at a premium price, often higher than the current market price. This is done to prevent the hostile takeover and in return, the acquirer agrees to withdraw the takeover bid.

What Is Greenmail