A Problem with the Tender Offer Mechanism in a Takeover

question 20

Multiple Choice

A problem with the tender offer mechanism in a takeover is the ______.The term refers to a situation in which rational behavior by each individual shareholder results in shareholders as a group being worse off.If individual target shareholders (correctly) foresee that the value of their shares will be worth more after the takeover than they will receive in the tender offer, they will choose not to tender their shares.

• A)holdover problem
• B)free rider problem
• C)holdout problem
• D)non-tender problem

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Definitions:

Myosin

Myosin is a type of motor protein involved in muscle contraction and movement of various types of cells and organelles in the cytoplasm.

Cyanobacteria

Photosynthetic bacteria that produce oxygen and are found in aquatic and terrestrial environments.

Photosynthesize

The process by which green plants and some other organisms use sunlight to synthesize foods from carbon dioxide and water.

Chloroplast

A organelle found in plant cells and other eukaryotic organisms that conducts photosynthesis, absorbing sunlight and converting it into energy.