A Corporate Raider Gains a Controlling Fraction of the Shares

question 26

Multiple Choice

A corporate raider gains a controlling fraction of the shares of a poorly managed company and replaces the board of directors. How does the corporate raider hope to make a profit in this case?

• A) by the sale of the assets held by the company that hold most of its value
• B) by the rise in the value of the stock held by the raider when the new board of directors is judged to be superior to the ousted board of directors
• C) by motivating the board of directors and other stakeholders in the company to make difficult short-term decisions that will increase the long-term viability of the company
• D) by removing the employees expectations of the continued poor performance of the company

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Definitions:

Persistence

The quality of continuing steadfastly despite challenges or obstacles.

Motivation

The method that begins, directs, and sustains actions aimed at achieving objectives.

Process Theories

Refer to models and concepts that explain the dynamics of how processes, such as decision-making or motivation, unfold over time within organizations.

Cognitive Processes

The mental actions or processes involved in acquiring knowledge and understanding through thought, experience, and the senses.