The Primary Purpose of a flIp-Over Provision Is To

question 43

Multiple Choice

The primary purpose of a flip-over provision is to:

• A) Increase the number of shares outstanding while also increasing the value per share.
• B) Dilute a corporate raider's ownership position thereby increasing the cost of a takeover.
• C) Reduce the market value of each share of stock.
• D) Give the existing corporate directors the sole right to remove a poison pill.
• E) Provide additional compensation to any senior managers who lose their jobs as a result of a corporate takeover.

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