Which of the Following Statements Is FALSE

question 33

Multiple Choice

Which of the following statements is FALSE?

• A)SEC rules make it difficult for investors to buy much more than about 10% of a firm in secret.After an acquirer acquires such an initial stake in the target,called a toehold,they would have to make their intentions public by informing investors of his large stake.
• B)With the availability of both the freezeout merger and the leveraged buyout as acquisition strategies,most of the value added accrues to the acquiring shareholders.
• C)The laws on tender offers allow the acquiring company to freeze existing shareholders out of the gains from merging by forcing non-tendering shareholders to sell their shares for the tender offer price.
• D)Premiums in LBO transactions are often quite substantial-while they can avoid the free-rider problem acquirers must still get board approval to overcome other defenses such as poison pills,as well as outbid other potential acquirers.

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Definitions:

American Psychological Association

A prominent organization in the United States that represents the field of psychology, committed to enhancing the development, dissemination, and utilization of psychological insights for the betterment of society.

Debriefing

A process wherein experimental participants are given a full explanation of the experiment upon its completion, including its purpose and any deceptions, to resolve any ethical concerns.

Excessive Payment

Paying out more than what is deemed necessary or required, often implying a waste or misuse of resources.

Local Laws

Rules and regulations that are enacted by local government bodies and applicable within a specific geographic area or community.