What does a shareholder rights plan, or poison pill, generally do?

1. AIt dilutes a hostile bidder if ownership crosses a specified threshold✓ Correct answer
2. BIt forces the board to accept the highest bid
3. CIt guarantees appraisal rights to all holders
4. DIt requires debt repayment at par immediately

Reading one answer is not the same as being ready

Lucky the Banker is a free practice app with 477+ Series 79 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.

• Why do parties file under the Hart-Scott-Rodino Act?
• Why might a seller accept stock consideration instead of all cash?
• What is the practical effect of the HSR waiting period after a required filing is made?
• What is the defining feature of a leveraged buyout?