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Greenmail Is a Takeover Defense Under Which a Target Firm

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Greenmail is a takeover defense under which a target firm repurchases a large block of stock at a premium from one or more shareholders in order to end a hostile takeover attempt by those shareholders.


Definitions:

Agents

Representatives or intermediaries who act on behalf of others in various transactions or negotiations.

Principals

Individuals who have the primary responsibility and authority within an organization, often relating to decision making and financial commitments.

VIE Theory

An organizational theory that explains motivation through three components: valence, instrumentality, and expectancy.

Valence

Refers to how attractive or unattractive an outcome is for a person.

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