The Defense Tactic That Involves Purchasing Shares Held by the Would-Be

question 25

Multiple Choice

The defense tactic that involves purchasing shares held by the would-be acquiring company at a price substantially in excess of their fair value is called:

• A) poison pill.
• B) pac-man defense.
• C) greenmail.
• D) white knight.

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Definitions:

Capitalization

The accounting practice of recording a cost/expense as an asset on the balance sheet rather than expensing it immediately.

Title Insurance

An insurance policy that protects real estate owners and lenders against any property loss or damage they might experience due to liens, encumbrances, or defects in the title to the property.

Construction Period Interest

Interest expense incurred during the construction of a long-term asset, which can be capitalized and added to the asset's cost basis.

IFRS Guidelines

The set of international accounting standards and principles that guide how financial statements should be prepared and disclosed.