Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
11th Edition
ISBN: 9780077861759
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Chapter 29, Problem 5CQ
Summary Introduction

To explain: Poison pills are good or bad for the stockholders and to explain that the acquiring firms are able to get around the poison pills.

Poison Pills:

Poison pill is a technique used by the target company to prevent itself from a hostile takeover. It is the strategy to discourage a hostile takeover. It is a pill used to eliminate the possibility of a hostile takeover.

Hostile Takeover:

It is the takeover of the target firm by an acquirer firm in which the takeover would not be approved by the management of the target firm. It is a type of takeover against the wishes of the board of directors on the takeover of the company.

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