Which of the Following Actions Does NOT Help Managers Defend

question 13

Multiple Choice

Which of the following actions does NOT help managers defend against a hostile takeover?

• A) Establishing a poison pill provision.
• B) Granting lucrative golden parachutes to senior managers.
• C) Establishing a super-majority provision in the company's bylaws to raise the percentage of the board of directors that must approve an acquisition from 50% to 75%.
• D) Retiring long-term debt early to reduce total debt on the balance sheet which will increase the firm's financial position.
• E) Finding a "white squire" that will buy enough of the target firm's shares to block the hostile takeover.

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Definitions:

Clean Price

The price of a bond without the addition of accrued interest, reflecting just the bond's face value and market conditions.

Coupon Rate

The yearly payment rate on a bond, expressed in percentage relative to its face value.

Yield

A measure often used in finance to indicate the earnings generated and realized on an investment over a particular period, expressed as a percentage of the investment's cost.

Price

The sum of money needed to buy a product, service, or property.