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Which of the following is the best definition of a poison put? Question 2 options: A...

Which of the following is the best definition of a poison put?

Question 2 options:

A situation where target firms provide compensation to top-level management in the event of a takeover.

A situation that forces the firm to buy securities back at some set price.

Selling major assets when faced with a takeover threat.

A situation where target firms sometimes seek a competing bid from a friendly bidder.

Ant tactic designed to discourage unwanted merger offers.

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Answer #1

Optyion E is correct. Ant tactic designed to discourage unwanted merger offers.

it is a strategy used by the Target Co to prevent or discourage attempts of a hostile takeover by an acquirer. Issuing this security will increase the value of the company. It basically makes the company more expensive to be bought by and acquirer.

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