Podcast
Play an AI-generated podcast conversation about this lesson
Questions and Answers
What is a common outcome for potential hostile targets that adopt poison pills?
What is a common outcome for potential hostile targets that adopt poison pills?
- Abnormal negative returns
- Decreased likelihood of receiving bids
- Statistically significant price increases
- Facilitation of takeover process (correct)
How do companies that abandon poison pills typically perform in the stock market?
How do companies that abandon poison pills typically perform in the stock market?
- Face higher likelihood of hostile bids
- Experience abnormal negative returns (correct)
- Show statistically significant price increases
- Receive increased bids
What effect does the existence of poison pills have on the likelihood of hostile bids being successful?
What effect does the existence of poison pills have on the likelihood of hostile bids being successful?
- Makes the success rate unpredictable
- Has no impact on the success rate of hostile bids
- Decreases the success rate of hostile bids (correct)
- Increases the success rate of hostile bids
Which type of firms tend to receive higher premiums in takeover contests?
Which type of firms tend to receive higher premiums in takeover contests?
Signup and view all the answers
What is the purpose of poison puts in relation to a company facing a hostile bid?
What is the purpose of poison puts in relation to a company facing a hostile bid?
Signup and view all the answers
