Albama Associates Is a Consulting Firm Owned by a Few

question 29

Multiple Choice

Albama Associates is a consulting firm owned by a few entrepreneurs.Rogo Consulting,a large consulting firm,tries to buy shares from some of the shareholders of Albama to obtain control of the company without making a formal acquisition proposal with the management.Albama's management invites a third party to acquire the company to prevent a hostile takeover by Rogo Consulting.This approach used by Albama to prevent hostile takeover is an example of a ________.

• A) white knight tactic
• B) counteroffer
• C) proxy fight
• D) direct offer
• E) poison pill defense

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Definitions:

Cash Outflow

Money or financial resources leaving a business, typically for expenses, investments, or other payments.

Cash Equivalents

Short-term, highly liquid investments such as Treasury bills, commercial paper, and money market funds, that are made solely for the purpose of generating a return on temporarily idle funds.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Indirect Method

An approach used in cash flow statements to adjust net income for changes in non-cash items to calculate cash provided by operating activities.