A Rights Offering That Gives Existing Target Shareholders the Right

question 17

Multiple Choice

A rights offering that gives existing target shareholders the right to buy shares in either the target or the acquirer at a deeply discounted price once certain conditions are met is called a:

• A)golden parachute.
• B)poison pill.
• C)classified board.
• D)white knight.
• E)recapitalization.

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Definitions:

Escape Behavior

An action taken to terminate an ongoing, unpleasant stimulus, effectively allowing an individual to avoid discomfort.

Drive

An internal motivational state created by physiological or psychological needs that drives an individual towards specific behaviors.

Pavlovian Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Reward

A stimulus that increases the likelihood of a behavior being repeated.