Fact Pattern 36-3
Popular Movies Corporation wants to gain control of Quality Films, Inc. The companies negoti?ate for several months, without coming to terms. Popular Movies decides to pursue a takeover at?tempt. Quality Films decides to resist.
-Refer to Fact Pattern 36-3. Quality Films issues shares that its shareholders can exchange for cash if a takeover is successful, intending to make Popular Movies's takeover attempt too expensive. This is a

Question

Fact Pattern 36-3 
Popular Movies Corporation wants to gain control of Quality Films, Inc. The companies negoti?ate for several months, without coming to terms. Popular Movies decides to pursue a takeover at?tempt. Quality Films decides to resist.
-Refer to Fact Pattern 36-3. Quality Films issues shares that its shareholders can exchange for cash if a takeover is successful, intending to make Popular Movies's takeover attempt too expensive. This is a

Quizplus · Accepted Answer

Quality Films' action of issuing shares that can be exchanged for cash if a takeover is successful is a poison pill defense. The intent of this defense is to make the takeover attempt too expensive for the acquiring company.