An Antitakeover Tactic in Which Existing Shareholders Have the Option

question 56

Multiple Choice

An antitakeover tactic in which existing shareholders have the option to buy additional shares of stock at a discount to the current market price is called ______.

• A)greenmail
• B)a golden parachute
• C)a poison pill
• D)scorched earth

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Definitions:

Interstate Commerce Act

A United States federal law that was designed to regulate the railroad industry and its monopolistic practices by requiring reasonable and just rates, prohibiting rebates, and ensuring fair treatment of railway users.

Wheeler-Lea Act

The federal law of 1938 that amended the Federal Trade Commission Act by prohibiting unfair and deceptive acts or practices of commerce (such as false and misleading advertising and the misrepresentation of products).

Antitrust Laws

Legislation designed to promote competition and prevent monopolies and other practices that restrain trade.

Department of Justice

A federal executive department of the U.S. government responsible for the enforcement of laws and administration of justice.