Consider a Case in Which Existing Shareholders Do Not Have

question 43

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)a leveraged buyout.
• B)a golden parachute.
• C)the free rider problem.
• D)a toehold.

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Definitions:

Punishment

A consequence that decreases the likelihood of a behavior being repeated.

Reinforcing Surroundings

Environmental factors or conditions that strengthen a particular behavior through positive or negative reinforcement.

Negative Punishment

A behavioral modification technique involving the removal of a desirable stimulus to decrease the likelihood of a behavior occurring again.

Time-Out

A behavioral modification technique involving temporary isolation or removal from a situation to decrease undesirable behavior.