Corporation L Is the Target of a Hostile Takeover by Corporation

question 50

Multiple Choice

Corporation L is the target of a hostile takeover by Corporation O.Corporation L's most valuable asset is its oil fields.To stop the takeover,Corporation L decides to sell its oil fields.This antitakeover technique is best described as:

• A) selling a crown jewel
• B) a poison pill
• C) a white knight merger
• D) a reverse merger
• E) greenmail

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Definitions:

Total Fixed Cost

The sum of all costs that remain constant regardless of the level of production or output in the short term.

Variable Cost

Costs that vary in total with changes in the level of production or other business activities.

Market Price

The existing cost for purchasing or selling an asset or service on the open market.

Purely Competitive Market

A market structure characterized by many buyers and sellers, all of whom sell identical products, which results in the agents having no control over prices.