Which One of the Following Statements Is TRUE

question 9

Multiple Choice

Which one of the following statements is TRUE?

• A) A shareholder rights provision discourages takeovers because the acquiring company will suffer dilution.
• B) A company has an interlocking board of directors if the CEO also serves as the chairman of the board of directors.
• C) A company whose board members are elected in staggered terms is said to have an interlocking board of directors.
• D) Shareholders want to prevent takeovers because they don't want the company purchased out from under them.
• E) A classified board is one in which the board members serve anonymously.

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Definitions:

Future Value

The predicted amount of money that a current investment will grow to at a certain future date, based on an assumed rate of growth or interest rate.

Interest

Interest is the charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Rule of 70

A formula to estimate the number of years required to double the value of something at a constant growth rate, calculated as 70 divided by the growth rate.

Interest

The cost incurred for the benefit of borrowing funds, usually presented as a yearly percentage rate.