Consider a Case in Which Existing Shareholders Do Not Have

question 40

Multiple Choice

Consider a case in which existing shareholders do not have to invest time and effort,but still participate in the gains from a takeover,while the bidder who puts in the time and effort is forced to give up substantial profits.This situation is called:

• A)the free rider problem.
• B)a toehold.
• C)a leveraged buyout.
• D)a freezeout merger.
• E)a management buyout.

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Definitions:

LEO

Low Earth Orbit, the region of space around the Earth at altitudes between approximately 160 to 2,000 kilometers.

MEO

Medium Earth Orbit, a type of orbit for satellites that is located approximately 2,000-35,786 kilometers above the Earth's surface.

GEO

An abbreviation for Geostationary Orbit, a circular orbit 35,786 kilometers above the Earth's equator and following the direction of the Earth's rotation.

LEO

Low Earth Orbit, a satellite system orbiting relatively close to Earth, often used for telecommunications, military, and observation purposes.