As a defensive maneuver, a firm issues deep-discount bonds that are redeemable at par in the event of an unfriendly takeover.These bonds are an example of

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These bonds are a form of poison pill, as they make the company less attractive to potential acquirers by increasing the cost of the acquisition. By making it more expensive for the acquirer to gain control, the hope is that it will dissuade them from attempting a takeover.

As a Defensive Maneuver, a Firm Issues Deep-Discount Bonds That