A Proxy Contest Can Best Be Defined As

question 64

Multiple Choice

A proxy contest can best be defined as:

• A) A corporate takeover bid communicated to the shareholders through a stock exchange.
• B) Attempts to gain control of a firm by soliciting a sufficient number of shareholder votes to replace existing management.
• C) All publicly owned stock in a firm is replaced with complete equity ownership by a private group.
• D) Going private transactions in which a large percentage of the money used to buy the stock is borrowed. Often incumbent management is involved.
• E) Agreement between firms to cooperate in pursuit of a joint goal.

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Definitions:

Merger

The combination of two or more companies into a single entity, typically to achieve synergistic effects.

Acquisition

The process by which a company buys most or all of the target company's ownership stakes to assume control.

Stockholders

Stockholders, or shareholders, are individuals or entities that own one or more shares of stock in a public or private corporation, granting them equity ownership.

Acquiring Firms

Companies that purchase a majority stake in another company to assume control of its operations and resources.