The two step buy-out is a recent merger ploy that has which of the following characteristics?
A) It is negotiated in a social, rather than a business setting.
B) The acquiring firm offers to pay a very high price for the target company's stock, and a short time later announces another price which may be higher or lower.
C) The acquiring firm offers to pay a very high price for the target company's stock for a limited time only, after which it will pay a considerably lower price.
D) It forces stockholders to sell out.

Question

Quizplus · Accepted Answer

The two step buy-out involves the acquiring firm offering a very high price for the target company's stock for a limited time only, after which it will pay a considerably lower price. This forces stockholders to sell out, but the negotiation takes place in a business setting rather than a social one. Option A is incorrect as the merger ploy is a business strategy, not a social one. Option B is incorrect as the acquiring firm specifies both prices upfront. Option D is incorrect as it is not the only characteristic of the two step buy-out.

The Two Step Buy-Out Is a Recent Merger Ploy That