Question

1.In M&A transactions, a Target’s Board of Directors is concern about their fiduciary responsibility to shareholders. They must be assured that shareholders are receiving the proper value for their investment. True or False

2.An astute bidder should always analyze the Target firm’s possible defenses, such as golden parachutes for key employees and poison pills, before making a bid. True or False

3.The accumulation of a Target firm’s stock by arbitrageurs makes the subsequent purchases of blocks of stock by the bidder easier. True or False

A successful Proxy Fight usually represents a less expensive means (cost and capital) of gaining influence        over a Target than a Tender Offer. True or False

5.A public announcement of a proposed takeover (a Bear Hug) often is designed to put pressure on the board of the Target firm. True or False

6.Reincorporation is a Takeover Defense. True or False

7.A proxy contest is one in which a group of dissident shareholders attempts to obtain representation on a     

firm’s board by soliciting other shareholders for the right to vote their shares. True or False

8.A Standstill Agreement is one in which the Target firm requires that the Acquirer agree not to make additional purchases of the Target’s stock.  True or False

The purchase premium is the dollar (or percentage) amount that the purchase price proposed for a target firm exceeds the Acquiring firm’s share price prior to announcement day. True or False

To discourage take overs, a company’s Bylaws may provide for a staggered board, the inability to remove directors without cause, and a super-majority voting requirement for approval of mergers. True or False

              

Answer 1

1) this statement is true because there exists a fiduciary relationship the Board of Directors and the shareholders , which forces the Board of Directors to act in the interest of shareholders

2) this is True Because a buyer capable of assessing the defenses before the deal is more likely to be successful

3) this is True because if arbitrageurs have accumulated stock , the bidder can easily acquire it by placing a bid high enough to entice the arbitrageurs

4) A successful proxy fight is less expensive than a tender offer because , a successful proxy fight is when group of shareholders join forces and gather enough votes to influence the decision

so this statement is True

5) this is True because it forces the board to directors to expedite the decision making process and present the deal to shareholders