The Reading states that in a takeover bid, management is permitted to take defensive action provided their actions do not have long term detrimental effects on the company itself.
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- [S1] A proxy fight involves having shareholders looking for board members that will allow an acquisition. [S2] A tender offer can be made with or without plans for an acquisitiona. Only S2 is true.b. Both are true.c. Only S1 is true.d. Neither is true.How does a hostile takeover affect the company’s stakeholder (shareholders, executives, employees, and society in general)? Is it usually beneficial or detrimental to these stakeholders? Why?What options does a company have if its board or management is opposed to an acquisition, a merger, or a takeover?
- Which of the following is NOT normally regarded as being a barrier to hostile takeovers? a. Abnormally high executive compensation. b. Targeted share repurchases. c. Poison pills. d. Shareholder rights provisions. e. Restricted voting rights.Which of the following is NOT normally regarded as being a barrier to hostile takeovers? (Points : 5) Abnormally high executive compensation Targeted share repurchases Shareholder rights provisions Restricted voting rights Poison pillsEthical Considerations. Are poison-pill defenses ethical? If a potential acquirer buys company stock legally,thereby becoming a part owner of the company, shouldmanagement be allowed to entrench itself against thewishes of this owner? Explain your answer.
- 16. An acquisition refers to the process whereby a company simply purchases another company. Question 16 options: True FalseAre poison-pill defenses ethical? If a potential acquirer buys company stock legally, thereby becoming a part owner of the company, should management be allowed to entrench itself against the wishes of this owner? Explain your answer.Which of the following statements is true when assessing whether potential voting rights contribute to control? Even when potential voting rights are not exercisable or convertible until a future date or until the occurrence of a future event, they are still considered in making that assessment. The proportions of profit or loss and changes in equity allocated to the parent and non-controlling interests are determined on the basis of present ownership, and should reflect any exercise or conversion of potential voting rights. Where potential voting rights are currently exercisable or convertible, they are considered when assessing whether an entity has the power to govern another entity's financial and operating policies. In assessing whether potential voting rights contribute to control, all of the facts and circumstances that affect those rights should be considered including the intention of management and the financial ability to exercise or convert such rights.
- The company except or reject the offerCompanies are required to value non-controlling interests on the acquisition date. Wat approaches might a company take to value non-controlling interest?Which of the following would NOT be included in the acquisition cost?A. Share issue costs.B. Fair value of any shares issued.C. Fair value of contingent consideration.D. Fair value of assets transferred.
