What Is the Main Lesson Learned from Investor Carl Icahn's

question 18

Multiple Choice

What is the main lesson learned from investor Carl Icahn's bid to purchase Clorox Co.?

• A) Boards will only defend against takeover attempts if their companies are performing poorly.
• B) The situation demonstrates two possibilities. First, Clorox was underperforming and the market for corporate control disciplined managers to improve performance. The second possibility was that investors sometimes take over companies that are performing well.
• C) Boards commonly make mistakes in rejecting takeover bids as shown in the case of Icahn's bid for Clorox Co.
• D) Clorox was clearly underperforming and Icahn's bid was a good example of the efficiency of the market for corporate control.

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Definitions:

Violating An Injunction

The act of disregarding or not complying with a court order that prohibits a specific action.

Robbing A Small Business

The act of illegally taking property from a small business through threats or violence.

Statute Of Limitations

A law that sets the maximum period one can wait before filing a lawsuit, depending on the type of case or claim, after which the legal claim is no longer valid.

Petty Theft

The theft of property of relatively low value, considered a minor crime.