Which of the Following Statements Regarding Recapitalization as a Takeover

question 52

Multiple Choice

Which of the following statements regarding recapitalization as a takeover defense is false?

• A) Another defense against a takeover is a recapitalization, in which a company changes its capital structure to make itself less attractive as a target.
• B) Restructuring itself can produce efficiency gains, often removing the principal motivation for the takeover in the first place.
• C) By increasing leverage on its own, the target firm can reap the benefit of the interest tax shields.
• D) In many cases, a substantial portion of the synergy gains that an acquirer anticipates from a takeover are savings from a decrease in leverage as well as other cost reductions.

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Definitions:

B.F. Skinner

An American psychologist and behaviorist best known for his contributions to the development of operant conditioning and behavior modification techniques.

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A type of attachment style characterized by anxiety, avoidance, and difficulty creating emotional connections with others, often resulting from less supportive caregiving in early development.

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Self-Awareness

The understanding by a person of their own character, feelings, desires, and drives.