A proxy contest can best be deﬁned as:
A) A corporate takeover bid communicated to the shareholders through a stock exchange.
B) Attempts to gain control of a ﬁrm by soliciting a suﬃcient number of shareholder votes to replace existing management.
C) All publicly owned stock in a ﬁrm is replaced with complete equity ownership by a private group.
D) Going private transactions in which a large percentage of the money used to buy the stock is borrowed. Often incumbent management is involved.
E) Agreement between ﬁrms to cooperate in pursuit of a joint goal.

Question

Quizplus · Accepted Answer

A proxy contest involves an attempt by an external party, typically an activist investor, to gain control of a company by soliciting shareholder votes to replace the existing management. This is often done through the use of a proxy statement, which allows shareholders to vote on proposed changes to the company's leadership or governance structure. Proxy contests can be contentious and are typically initiated when the external party believes that the existing management is not acting in the best interests of shareholders.

A Proxy Contest Can Best Be Deﬁned As