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:

Stereotypes

Widely held but fixed and oversimplified images or ideas of a particular type of person or thing, often based on limited information.

Appearances

Appearances refer to the outward or visual aspects of someone or something, how entities are perceived visually by others.

Stereotypic Judgments

Stereotypic judgments are assessments made about individuals or groups based on generalized beliefs or stereotypes rather than on their individual characteristics.

Characteristics

Qualities, traits, or features that distinguish a person, object, or phenomenon, defining its nature and behavior.