Which of the Following Actions Does NOT Help Managers Defend

question 13

Multiple Choice

Which of the following actions does NOT help managers defend against a hostile takeover?

• A) Establishing a poison pill provision.
• B) Granting lucrative golden parachutes to senior managers.
• C) Establishing a super-majority provision in the company's bylaws to raise the percentage of the board of directors that must approve an acquisition from 50% to 75%.
• D) Retiring long-term debt early to reduce total debt on the balance sheet which will increase the firm's financial position.
• E) Finding a "white squire" that will buy enough of the target firm's shares to block the hostile takeover.

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Definitions:

Monopoly

A market structure characterized by a single seller, selling a unique product in the market without any close substitutes.

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.