A Rights Offering That Gives Existing Target Shareholders the Right

question 13

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)white knight.
• C)poison pill.
• D)classified board.

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Definitions:

Inverse Floaters

Bonds that have coupon rates that move inversely to some reference rate, typically a short-term interest rate.

Coupon Rates

The annual interest rate paid on a bond, expressed as a percentage of the face value.

Interest Rates

The charge, as a percentage of the principal sum, levied by a lender on a borrower for asset usage.

Callable Bond

A type of bond that gives the issuer the right to repay the bond before its maturity date, often at a predetermined price.