A rights offering that gives existing target shareholders the right to buy shares in either the target or an 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

Question

Quizplus · Accepted Answer

This describes a specific type of poison pill called a “top-up” option, where existing shareholders are given the option to purchase additional shares at a discounted price in order to dilute the ownership of the hostile bidder. The other options are unrelated to this mechanism.

A Rights Offering That Gives Existing Target Shareholders the Right