Which of the following statements is CORRECT? a. A proxy fight is an attempt by

Question

Which of the following statements is CORRECT?

a.   A proxy fight is an attempt by a person or a group to gain control of a firm by getting its stockholders to grant that parson or group the authority to fight in court to replace the current management.

b.   Takeover is an action whereby a person or group succeeds in ousting a firm’s management and taking control of the company.

c.   Preemptive right is a provision in the corporate charter or bylaws that gives common bondholders the right to purchase on a pro rata basis new issues of corporate bonds.

d.   Founders’ shares are stocks owned by firm’s founders that enables them to maintain control over the company by owning the majority of stock outstanding.

Explanation / Answer

Ans is option b

The proxy fight is basically done by a outside group overthrow the management take the business control when the company earnings are bad by soliciting the proxies. The preemptive fight is basically give to the common holders and for common stock new issue. In case of founder shares control can be there in company by not having majority stock outstanding.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.