Which of the following statements is true of a hostile takeover?

A. A hostile takeover results when management wants the firm to be taken over.
B. A hostile takeover is most likely to occur when a firm's stock is undervalued relative to its potential.
C. After a hostile takeover, managers of the acquired firm generally retain the positions they had prior to the takeover.
D. A hostile takeover does not allow managers to take actions that maximize stock prices.
E. A hostile takeover results in poor management and inefficient operations after the takeover is completed.


Answer: B

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