The Takeover Constraint Refers to _____________

question 29

Multiple Choice

The takeover constraint refers to _____________.

• A) constraints placed by the firm on raiders who want to take over the firm
• B) legal constraints that limit the ability of the raiders to acquire a firm
• C) provisions in the charter of a company that prevents it from attempting a takeover of other companies
• D) the risk of being acquired by a hostile raider

---

Definitions:

Inventories

The raw materials, work-in-progress products, and finished goods that a company holds for the purpose of sale in the future.

Accounts Payable

Liabilities to creditors that must be paid within a short period, usually less than a year.

Operating Activities

Activities that constitute the primary or main activities of an organization, including production, sales, and delivery of services.

Cash Dividend

A cash distribution given to shareholders from the company's earnings.