Which one of the following generally has a flip-in provision that significantly increases the cost to a shareholder who is attempting to gain control over a firm?
A)golden parachute
B)standstill agreement
C)greenmail
D)poison pill
E)white knight

Question

Quizplus · Accepted Answer

A poison pill is a defensive strategy used by companies to prevent or discourage hostile takeovers. It generally includes a flip-in provision, which allows existing shareholders to purchase additional shares at a discounted price if an outside entity acquires a certain percentage of the company's shares, significantly increasing the cost for the acquiring shareholder. Golden parachute, standstill agreement, greenmail, and white knight are also defensive strategies used by companies to prevent hostile takeovers but do not generally include a flip-in provision.

Which One of the Following Generally Has a Flip-In Provision