Poison Pills Self-Quiz

 

 

 

 

 

 

 

A “shareholder rights plan” is otherwise referred to as:
Choice 1 preferred stock, preferred as to dissolution.
Choice 2 a special voting privilege for some stock classes.
Choice 3 a poison pill meant to thwart buyers.
Choice 4 preferred stock, preferred as to dividends.
Poisoned, Inc. has just adopted a shareholder rights plan. It is likely that the markets might choose to:
Choice 1 lower its price estimates of shares of Poisoned.
Choice 2 raise its price estimates of shares of Poisoned.
Choice 3 lower the S&P ratings on bonds of Poisoned.
Choice 4 raise the S&P ratings on bonds of Poisoned.
RigaMortis, Inc. has adopted a “dead hand” poison pill. It is most likely the case that:
Choice 1 the plan is legal and RigaMortis is located in Pennsylvania.
Choice 2 the plan is opposed by members of the current board.
Choice 3 the plan is legal and RigaMortis is located in Ohio.
Choice 4 the plan is supported by shareholders and the market.
Z Corp. is attempting a takeover of Y Corp. Y Corp. has a poison pill in place. Before Z Corp. goes too far in the acquisition, it will be forced to:
Choice 1 trigger the poison pill.
Choice 2 sue Y Corp.
Choice 3 negotiate with Y Corp's management.
Choice 4 redeem the pill.
K Corp. is attempting to acquire P Corp. K has been actively acquiring P’s stock for the last two months and has managed to take quite a large position. However, without realizing it, K has acquired a position so large that it has inadvertently triggered P’s poison pill. The result to K is that:
Choice 1 it will be sued by P Corp. for triggering the pill.
Choice 2 it must automatically sell its shares at the lowest price it paid.
Choice 3 it will have to resell some of its shares until it goes below the pill's trigger level.
Choice 4 it will be massively diluted by the pill and cause financial chaos for P.

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