CFA Practice Question
Select the incorrect statement(s).
II. A greenmail is a compensation arrangement, which gives a generous package for managers who have to leave the company because of a takeover.
III. When shares held by a raider are bought back by the company at a negotiated price above the current market price, it is called a poison pill.
I. A(n) tender offer is a general offer made directly to a firm's shareholders to buy their stock at a specified price.
II. A greenmail is a compensation arrangement, which gives a generous package for managers who have to leave the company because of a takeover.
III. When shares held by a raider are bought back by the company at a negotiated price above the current market price, it is called a poison pill.
A. I and III
B. II and III
C. All of them
Explanation: II: golden parachute. III: greenmail.
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