Borrowing Funds on Terms That Would Require Immediate Repayment of All

question 24

True/False

Borrowing funds on terms that would require immediate repayment of all funds if the firm is acquired, selling off valuable assets, and granting huge "golden parachutes" that open if the firm is acquired are 3 procedures used to defend against hostile takeovers These strategies are known as "poison pills."

---

Definitions:

Master Budgeting

A comprehensive financial planning document that encompasses all of a company’s budgets, including sales, production, and financial budgets.

Cash Budget

A cash budget is a financial plan that estimates cash inflows and outflows over a specific period, often used by businesses to manage liquidity and ensure they have enough cash to meet obligations.

Budgeted Financial Statements

Financial statements projected for a future period, based on estimates of revenues, expenses, and other financial activities.

Operating Budgets

Detailed projections of income and expenses associated with the day-to-day operations of a business over a certain period.