- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 3. Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits
- Subject 2. Corporate Governance Mechanisms
CFA Practice Question
Which of the following statements is most likely accurate?
A. In a proxy fight, shareholders are persuaded to vote for a group seeking a controlling position on the company's board of directors.
B. In a hostile takeover, shareholders sell their interests directly to a group seeking control of the company.
C. In a tender offer, an attempt is made by one entity to acquire another company without the consent of the company's management.
Explanation: A tender offer describes a situation where shareholders sell their interests directly to a group seeking control of the company. On the contrary, a hostile takeover refers to an attempt made by one entity to acquire another company without the consent of the company's management.
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