In the fiNancial World, the Term Poison Pill Refers To

question 211

Multiple Choice

In the financial world, the term poison pill refers to:

• A) The restructuring of a firm such that the stock is delisted and no longer available to the public.
• B) A type of financial agreement that forces firms to buy back their securities at a stated price.
• C) An unfriendly takeover offer that is so attractive it cannot be refused.
• D) An unfriendly takeover that replaces the existing management.
• E) A tactic to make unfriendly takeover attempts unappealing.

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Definitions:

Cost Formula

A mathematical expression or equation used to calculate the total cost of production, taking into account fixed costs, variable costs, and output levels.

Activity Level

The degree to which resources are utilized in the production process, often measured in units produced, machine hours, or direct labor costs.

Total Cost

The sum of all expenses involved in producing a good or delivering a service, including fixed and variable costs.

Contribution Margin

The gap between sales income and variable expenses, demonstrating the extent to which income aids in covering constant costs and producing earnings.