A firm decides to defend itself from a hostile takeover.Management tries to solicit competing takeover bids from other firms.This defense involves the use of a:
A) Poison pill
B) White knight
C) Shareholders' rights plan
D) Tender offer

Question

Quizplus · Accepted Answer

A white knight is a friendly acquirer who rescues a target firm from the hostile bidder. In this scenario, the management is trying to solicit competing takeover bids to counter the hostile takeover, which involves finding a white knight to rescue the firm. The other options - poison pill, shareholders' rights plan, and tender offer - are all defensive tactics used by the target firm to deter or delay the hostile takeover bid, but they do not involve soliciting competing takeover bids.

A Firm Decides to Defend Itself from a Hostile Takeover