Asked by Salli Braswell on Jun 30, 2024
Verified
What is one of the actions that CANNOT help managers defend against a hostile takeover?
A) establishing a poison pill provision
B) granting lucrative golden parachutes to senior managers
C) establishing a super-majority provision in the company's bylaws to raise the percentage of the board of directors that must approve an acquisition from 50% to 75%
D) changing the voting procedures for the board election from a noncumulative to a cumulative one
Poison Pill
A defensive strategy used by companies to avoid hostile takeovers by making the company less attractive to the potential acquirer.
Golden Parachutes
Large financial compensation packages provided to executives upon termination, usually in the context of a merger or takeover.
- Examine the impact of shareholder rights plans (poison pills) and additional defensive strategies on attempts at corporate takeovers.
Verified Answer
VL
Vanessa LaheeJul 04, 2024
Final Answer :
D
Explanation :
Changing the voting procedures for the board election from a noncumulative to a cumulative one actually makes it easier for minority shareholders to gain representation on the board, potentially facilitating a hostile takeover rather than defending against it.
Learning Objectives
- Examine the impact of shareholder rights plans (poison pills) and additional defensive strategies on attempts at corporate takeovers.