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."

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Definitions:

Net Income

The total earnings or profit of a company after deducting all expenses, taxes, and losses from the total revenue.

Retained Earnings

The portion of net income that is retained by the company rather than distributed to its shareholders as dividends.

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits in the form of cash.

Declaration of Dividends

The formal announcement by a company's board of directors to distribute profits to shareholders, specifying the dividend amount and payment date.