Which of the Following Is Not an Example of Signaling

question 72

Multiple Choice

Which of the following is not an example of signaling?

• A) An employer asks if he can run a background check on a potential employee before hiring him or her.
• B) A boyfriend gives his girlfriend a necklace with her favorite gemstone for Valentine's Day.
• C) A home flooring company advertises its high Better Business Bureau rating during its television commercials.
• D) An college applicant lists her membership in academic honor societies on her application.

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Definitions:

Ethical

Pertaining to or dealing with morals or principles of morality; pertaining to right and wrong in conduct.

Shareholder Rights Plan

A strategy used by corporations to deter hostile takeovers by allowing shareholders the right to purchase additional shares at a discount, often referred to as a "poison pill."

Greenmail

A situation where a company buys back its own shares from a potential acquirer at a price higher than the market value to avoid a takeover.

Poison Pill

A poison pill is a defense strategy used by a corporation to deter or prevent hostile takeovers.