What Is a Poison Pill,and How Does It Prevent a Hostile

question 10

Essay

What is a poison pill,and how does it prevent a hostile takeover?

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Definitions:

Bond Issue

The process by which a corporation or government raises funds by selling bonds to investors.

Effective Interest Method

A technique used in accounting to allocate the interest expense or income of a bond over its lifetime based on the bond's carrying amount at each interest period.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.