Tandem Corporation Is the Target of a Hostile Takeover by Alpha

question 9

Multiple Choice

Tandem Corporation is the target of a hostile takeover by Alpha Corporation.Management of Tandem fears for its jobs because of statements made by Alpha's management about the need to streamline the management of Tandem.Tandem works out a deal with Beta Corporation for the two corporations to merge with Beta surviving.Beta has indicated that it will leave present management intact.Two years after the merger with Beta,an independent consultant reports that there are too many levels of management in the combined corporation and that 30 percent of management positions should be eliminated.In this circumstance,which of the following occurred?

• A) Tandem prevented the merger with Alpha with a poison pill.
• B) Tandem prevented the merger with Alpha by a white knight merger with Beta,which was an illegal tactic.
• C) Tandem prevented the merger with Alpha by a white knight merger with Beta,which was legal; Tandem's management is liable to shareholders for the loss of profits due to the excessive levels of management.
• D) Tandem prevented the merger with Alpha by a white knight merger with Beta,which was legal; Tandem's management is not liable to shareholders for the loss of profits due to the excessive levels of management assuming it is protected by the business judgment rule.

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Definitions:

Homozygote

An organism that has two identical alleles for a specific trait or gene.

Identical Alleles

Alleles that are the same at the same locus on both chromosomes in a pair, resulting in a uniform expression of a trait.

Homologous Chromosomes

Pairs of chromosomes in a diploid organism, one inherited from each parent, that have corresponding gene sequences and structures.

Crossing Over

A genetic process occurring during meiosis where homologous chromosomes exchange segments of genetic material to form recombinant chromosomes, contributing to genetic diversity.