A fiNancial Device Designed to Make Unfriendly Takeover Attempts fiNancially

question 31

Multiple Choice

A financial device designed to make unfriendly takeover attempts financially unappealing, if not impossible, is called (a) :

• A) Golden parachute.
• B) Standstill.
• C) Greenmail.
• D) Poison pill.
• E) White knight.

---

Definitions:

Profit Margin Ratio

A financial metric that measures the extent to which a company or business activity makes money, expressed as a percentage of revenue.

Net Income

The company's earnings post all deductions for expenses and taxes from its income.

Net Sales

The total revenue from sales after subtracting returns, allowances for damaged or missing goods, and discounts.

Return On Common Stockholders' Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders' equity, indicating the profitability of a company from the common shareholders' perspective.