The Primary Purpose of a Flip-Over Provision Is To

question 104

Multiple Choice

The primary purpose of a flip-over provision is to:

• A) Increase the number of shares outstanding while also increasing the value per share.
• B) Dilute a corporate raider's ownership position thereby increasing the cost of a takeover.
• C) Reduce the market value of each share of stock.
• D) Give the existing corporate directors the sole right to remove a poison pill.
• E) Provide additional compensation to any senior managers who lose their jobs as a result of a corporate takeover.

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Definitions:

GAAP's Goals

The objectives of Generally Accepted Accounting Principles, which include ensuring the reliability, consistency, and comparability of financial reporting.

Financial Statements

Documents that provide an overview of a company's financial condition, including income statement, balance sheet, and statement of cash flows.

Pro Forma Numbers

Financial data that projections or estimates are based on, often used to show potential financial performance.