Mergers Acquisitions and Corporate Restructurings 6th Edition by Patrick A. Gaughan - Test Bank

Mergers Acquisitions and Corporate Restructurings 6th Edition by Patrick A. Gaughan – Test Bank

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Sample Questions Are Posted Below

Questions: Chapter 5 – Antitakeover Measures

1. Which of the following are usually considered active antitakeover measures?
   1. Greenmail
   2. Poison pills
   3. Corporate charter amendments
   4. All of the above

2. Which of the following are usually considered preventative antitakeover measures?
   1. Greenmail
   2. Poison pills
   3. Tender offers
   4. All of the above

3. Goldsmith was able to circumvent this particular Crown-Zellerbach defense by:
   1. Poison pill
   2. Greenmail
   3. Corporate charter amendment
   4. None of the above

4. Morck, Shleifer, and Vishny found that with higher share ownership by management there tends to be:
5. More antitakeover defense
6. Higher Tobin q’s
7. Lower shareholder values
8. None of the above

5. This person invented the poison pill:
   1. Sir James Goldsmith
   2. Joe Flom
   3. Martin Lipton
   4. Carl Icahn

6. The case involving this company established the legality of poison pills in the United States:
   1. Crown-Zellerbach
   2. Kraft Foods
   3. Universal Foods
   4. Household International

7. Poison pill adoptions have:
   1. Increased in recent years
   2. Deceased in recent years
   3. Been stable
   4. Have slowly and steadily increased

8. Research shows that changing the state of incorporation:
   1. Had no significant shareholder wealth effects
   2. Resulted in increased shareholder wealth effects
   3. Resulted in decreased shareholder wealth effects
   4. None of the above

9. The use of greenmail has:
   1. Gone up in the 2000s
   2. Has steadily declined and is not common today
   3. Is used mainly when the raider is a hedge fund
   4. Is used mainly when the raider is a private equity fund

10. The Pac-Man defense:
    1. Has found a new resurgence
    2. Was done in the Bendix-Martin Marietta battle
    3. Is not common today
    4. Both a and b
    5. Both b and c

True or False

11. Flip-in provisions allow holders of rights to acquire stock in the target, as opposed to flip-over rights, which allow holders to acquire stock in the acquirer.

True or False

12. Back-end plans are also referred to as note purchase rights plans.

True or False

13. Malatesta and Walking found that, on average, the managerial ownership percentage was significantly less for firms that adopted poison pills compared with industry averages.

True or False

14. The Georgeson studies showed that pill-protected companies had reduced shareholder values.

True or False

15. Poison pills can increase shareholder values through facilitating an auction process.

True or False

16. The research of Bebchuk and Cohen found a negative relationship between firm value, as measured by Tobin’s q, and the implementation of a staggered board.

True or False

17. Masulis, Wang, and Xie found that the greater the divergence between insider voting rights and cash flow rights, the more likely shareholder wealth will increase.

True or False

18. Research has shown that shareholders in companies that become white knights experience increased shareholder wealth.

True or False

19. Wyeth, formerly known as American Home Products, paid the highest termination fees in history.

True or False

20. Jarrell found that litigation can increase shareholder value through facilitating auctions.

True or False

Answers: Chapter 5

1. a 11. True
2. b 12. True
3. a 13. True
4. b 14. False
5. c 15. True
6. d 16. True
7. b 17. False
8. a 18. False
9. b 19. False
10. e 20. True