BSX Inc. gave shareholders the right to purchase company stock at a 50 percent discount if a group without approval of BSX's board of directors acquired more than 20 percent of the company's shares. This is an example of
A) a stock buyback.
B) a conglomerate merger.
C) greenmail.
D) a poison pill.
E) a vertical merger.

Question

Quizplus · Accepted Answer

This is an example of a poison pill, which is a defense mechanism used by companies to deter hostile takeovers. In this case, BSX Inc. gave shareholders the right to purchase company stock at a discounted price, making it more expensive for the hostile group to acquire the necessary shares to gain control of the company.

BSX Inc Gave Shareholders the Right to Purchase Company Stock at at a 50