Which of the Following Statements Is False

question 20

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.

Grasp the voting rights and mechanisms shareholders can use to exert influence over corporate decisions.

Differentiate between preferred stock and common stock in terms of dividend priority and bankruptcy claims.

Calculate dividend yield and its significance in stock valuation.

Recognize the characteristics and financial implications of a cash cow.

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Definitions:

Cytoplasm

The gel-like substance inside a cell, excluding the nucleus, where most cellular activities occur.

Muscle Fiber

An individual muscle cell, known for its elongated shape, that contracts to produce force and movement.

Sarcoplasm

A type of cytoplasm found in muscle cells, rich in stored lipids, glycogen, and the proteins necessary for muscle contraction.

Intercalated Discs

Specialized structures located at the cell boundaries in cardiac muscle fibers that facilitate the coordinated contraction of the heart muscle.