Corporations Can Use Many Tools in Order to Prevent Takeovers

question 41

True/False

Corporations can use many tools in order to prevent takeovers, including poison pills, which require a supermajority of shareholder votes to approve selling the firm, selling the most profitable part of the company, and staggered boards.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, often referred to as "shareholders' equity" or "owners' equity."

Unrealized Holding

A gain or loss on investments that has occurred but has not yet been sold or cashed in, hence not yet realized as an income or loss.

Trading To Available-For-Sale

The process of reclassifying a security from being actively traded to being held with the intention not to sell in the near term.

Comprehensive Income

The total change in equity for a reporting period other than from transactions with owners, including all non-owner changes in equity such as unrealized gains and losses.