The Term "Golden Parachute" Refers to

question 18

Multiple Choice

The term "golden parachute" refers to

• A) a clause requiring that huge dividend payments be made upon takeover.
• B) pay given to executives fired because of a takeover.
• C) financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it.
• D) managers of a firm in a hostile takeover approaching a third party about making the acquisition.

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Definitions:

Amortization Period

The total length of time over which an individual loan or debt is scheduled to be paid off.

Compounded Semi-annually

Compounded semi-annually refers to the calculation of interest where the principal amount is credited with interest twice a year.

Amortization Period

The total time period over which a loan or mortgage is scheduled to be paid off through regular payments.

Compounded Semi-annually

A method of calculating interest where the earned interest is added to the principal every six months, allowing interest to be earned on the previously earned interest.