A Financial Device Designed to Make Unfriendly Takeover Attempts Financially

question 8

Multiple Choice

A financial device designed to make unfriendly takeover attempts financially unappealing,if not impossible,is called:

• A) a golden parachute.
• B) a standstill agreement.
• C) greenmail.
• D) a poison pill.
• E) a white knight.

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Definitions:

Potential Entry

The possibility or threat of new competitors entering a market, which can influence the behavior and strategies of existing firms.

Economic Inefficiency

Economic Inefficiency occurs when resources are not allocated optimally, leading to waste or missed opportunities in the production or distribution of goods and services.

Oligopoly

A market structure characterized by a small number of firms which dominate the market, leading to limited competition.

First-Mover Advantage

In game theory, the benefit obtained by the party that moves first in a sequential game. A situation that occurs in a sequential game if the player who gets to move first has an advantage in terms of final outcomes over the player(s) who move subsequently.