Raider Corporation (RC)attempted to Take Over Targetnorth Corporation (TC)using a Tender

question 78

Multiple Choice

Raider Corporation (RC) attempted to take over Targetnorth Corporation (TC) using a tender offer.The tender offer price was twice the market price for TC shares.TC management opposed this takeover,as a result of which it failed.Shareholders of TC who had hoped to sell their shares at a large profit want to sue the management of TC for spoiling the takeover.If they sue TC management,will the shareholders succeed?

• A)Yes,if they can show that TC management did not carefully study the RC tender offer.
• B)Yes,if they can show that they would have been much better off accepting the tender offer.
• C)No,the business judgment rule protects management in all cases of resisting a takeover.
• D)No,even if the shareholders can show that management resisted the takeover in their own self-interest.

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Definitions:

Goods Received

The receipt of goods ordered by a company, often documented with a goods received note (GRN) that verifies the delivery and details of the goods.

Bad Debt Expense

Money that is not recoverable from debtors and is considered a loss for the business because it is uncollectable.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of a company's accounts receivable that may ultimately be uncollectible.

Sales Discount

A reduction in the price of goods or services offered to customers, typically to prompt early payment or bulk purchases.