A rights offering that gives existing target shareholders the right to buy shares in either the target or the acquirer at a deeply discounted price once certain conditions are met is called a:
A)golden parachute.
B)poison pill.
C)classified board.
D)white knight.
E)recapitalization.

Question

Quizplus · Accepted Answer

A poison pill is a defensive strategy used by companies to deter unwanted takeover attempts. It allows existing shareholders to purchase additional shares at a discount, diluting the ownership interest of a potential acquirer and making the takeover less attractive or more costly.

A Rights Offering That Gives Existing Target Shareholders the Right