The Primary Purpose of a Flip-In Provision Is To

question 85

Multiple Choice

The primary purpose of a flip-in provision is to:

• A) increase the number of shares outstanding while also increasing the value per share.
• B) dilute a corporate raider's ownership position.
• C) reduce the market value of each share of stock.
• D) give the existing corporate directors the sole right to remove a poison pill.
• E) provide additional compensation to any senior manager who loses his or her job as a result of a corporate takeover.

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Definitions:

Noncash Investing

Activities related to the acquisition and disposal of long-term assets and other investments not involving immediate cash transactions.