Question

In the context of corporations, what is a white knight?

Multiple Choice

• a more acceptable firm that is willing to acquire the firm threatened by a hostile takeover

• an attempt to fend off a hostile takeover by raising capital through an initial public offering

• an attempt to fend off a hostile takeover by requiring the deal to be approved by a majority of shareholders

• an attempt to fend off a hostile takeover by selling stock at prices below the market value

• a group of investors who have borrowed money to acquire a firm

Answer 1

Ans:- In the context of corporations, a white knight is a more acceptable firm that is willing to acquire the firm threatened by a hostile takeover. option (a) is the right answer.

White Knight:- In the business world, a white knight is more sort of a friendly acquirer of a company that is facing the risk of a hostile takeover by another company that is known as a black knight. The intend of the acquisition is to acquire the company in a friendly way preffered the board of directors. In other words, the white knight is the savior of the target company.