Which of the Following Is the Best Definition of a Shareholder

question 122

Multiple Choice

Which of the following is the best definition of a shareholder rights plan?

• A) The splitting up of a company into two or more companies.
• B) The distribution of shares in a subsidiary to existing parent company shareholders.
• C) Provisions allowing existing shareholders to purchase stock at some fixed price should an outside takeover bid take place, discouraging hostile takeover attempts.
• D) Attempts to gain control of a firm by soliciting a sufficient number of shareholder votes to replace existing management.
• E) A financial device designed to make unfriendly takeover attempts unappealing, if not impossible.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health of the company.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument to present value, helping to determine its worth.

Intangible Benefits

Benefits that cannot be physically touched or quantified easily, such as brand reputation or customer loyalty.

Required Rate Of Return

The minimum percentage return an investor expects to achieve by investing in a particular asset or project.