In TheCarmody V

question 4

Multiple Choice

In theCarmody v.Toll Bros.,Inc.case discussed in the text,the Delaware Court of Chancery analyzed the question of the legality of a dead-hand pill under Delaware law.In striking down the dead-hand pill,the court ruled that:

• A) the directors appropriately used the dead-hand pill which guaranteed that majority shareholders in place before a hostile bidding attempt were entitled to vote to block any later proposed vote on a merger.
• B) the directors appropriately used the dead-hand pill because directors are entitled to use any means necessary in order to block a hostile takeover.
• C) the dead-hand pill violated the state general corporation law for a number of reasons including that it violated the directors' duty of loyalty.
• D) the dead-hand pill, which could only be redeemed by directors in office after a hostile bidder gained control or by their designated successors, violated the state general corporation law because it prejudiced directors in place prior to the takeover.

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A systematic approach involving three distinct phases to complete a task or solve a problem, often used in managerial decision-making.

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A structured process of collecting, recording, summarizing, and reporting financial transactions of a business or individual.