FOUND.OF FINANCIAL MANAGEMENT-ACCESS
17th Edition
ISBN: 9781260519969
Author: BLOCK
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 20, Problem 9DQ
Summary Introduction
To explain: The way in which firms try to avoid being a part of a targeted takeover.
Introduction:
Targeted takeover:Â
A targeted takeover is a mechanism through which potential companies takes over non-performing entities with high cash balances and large number of outstanding shares.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Which of the following is true regarding IPO pricing?
Answers:
Underpricing is more popular which hurts the firm
Underpricing is more popular which hurts the investment bank
Overpricing is more popular which hurts the firm
Overpricing is more popular which hurts the investment bank
Many firms have devised defenses that make it more difficult or costly for other firms to take them over. How might such defenses affect the firm's agency problems? Are managers of firms with formidable takeover defenses more or less likely to act in the shareholders' interests rather than their own? What would you expect to happen to the share price when management proposes to institute such defenses?
“Merger may be profitable but are they good for the economy?” Explain your answer towards this statement.
Chapter 20 Solutions
FOUND.OF FINANCIAL MANAGEMENT-ACCESS
Knowledge Booster
Similar questions
- V7. Corporate risk views the risk of a project as if it were held in isolation, whereas, stand-alone risk views the risk of a project in the context of the business’s portfolio of projects. True or Falsearrow_forwardWhat are some alternative ways of structuring takeover bids?arrow_forwardIt is quite often we observe some firms takeover target firms from a different industry. If diversifying harms firm value and it is more efficient to make diversification at the investor (shareholder) level than at the firm level, why do you think the managements still choose to make diversified acquisitions?arrow_forward
- 4 Which of the following is TRUE? Select one alternative O If all companies in an industry do not hedge, a company in the industry can reduce its risk by hedging. O If all companies in an industry do not hedge, a company is liable increase its risk by hedging. O Hedging can always be done more easily by a company's shareholders than by the company itself. O If all companies in an industry hedge, a company in the industry can sometimes reduce its risk by choosing not to hedge. Reset Maximum marks:arrow_forwardWhen an MNC restructures its operations to reduce its economic exposure, it may sometimes forgo economies of scale. Explain. (See Ch 12, Q4)arrow_forward8, Which of the following is/ are the plausible concern (s) related to the impact of algorithmic and high-frequency trading on securities markets?A, snowballing effect of selling pressure which may lead to increased systematic risk.B, widening bid-ask spreadC increased complexity of regulatory oversightarrow_forward
- How to avoid rogue trading? What are the consequences of rougue trading?arrow_forwardFirms often pursue international mergers and acquisitions instead of forming a cross-border strategic alliance because of the increased risk associated with the alliances. a. True Ob. Falsearrow_forwardIn defending against a hostile takeover, the strategy that involves the target firm creating securities that give their holders certain rights that become effective when a takeover is attempted is called the ______________ strategy. Select one: a. shark repellent b. golden parachute c. greenmail d. poison pillarrow_forward
- Which of the following does NOT refer to the ways of how a multinational company can reduce political risk? Taking a conservative approach to investment and adjusting NPV of the project by reducing expected cash flows or by increasing the cost of capital in accordance with existing trends. Purchasing insurance policy against political risks. Acquiring minor shares in foreign corporations. Creating a joint venture with local partners or a consortium with other multinational companies.arrow_forwardWhat creates rogue traders?arrow_forwardWhich of the following correctly, characterizes the risks in merger arbitrage? O A. The strategy is likely to suffer large losses in market downturns. O B. The strategy is likely to suffer small losses in market downturns.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTBusiness/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:CengageAuditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Business/Professional Ethics Directors/Executives...
Accounting
ISBN:9781337485913
Author:BROOKS
Publisher:Cengage
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning