Suppose the managers of a company have driven the stock price down because they have spent the investors' money on lavish perquisites like golf club memberships.

Question

Quizplus · Accepted Answer

All of the options are true. If the managers have driven down the stock price, it could attract the attention of a corporate raider who sees an opportunity to buy the company at a lower price. If the hostile takeover is successful, the managers responsible for the decline may lose their jobs during the restructuring process. And if the restructuring is successful, the corporate raider may be able to sell their shares at a profit.

Suppose the Managers of a Company Have Driven the Stock