Which of the following is NOT one of the benefits of obtaining a toehold?
A)Acquiring shares at the market price requires no premium.
B)A toehold reduces the number of shares needed to be purchased in a later takeover bid.
C)A toehold eliminates competition from other potential acquirers.
D)A toehold can increase the probability of success of a later takeover.

Question

Quizplus · Accepted Answer

A toehold does not eliminate competition from other potential acquirers. In fact, it may attract competition as other companies may see the potential of the target company and try to enter into a bidding war. The other three options are benefits of obtaining a toehold.

Which of the Following Is NOT One of the Benefits