Hostile takeovers of corporations have been in the business news for some time now. Several states have passed laws making it harder for out-of-state corporations to acquire firms headquartered in their states. Several corporations have established
"golden parachutes" to give executives high payoffs in case of hostile takeover. What market imperfection is likely to be worsened by these actions? Explain.
The problem of agency is likely to grow worse. Managers are less likely to increase earnings and share prices in order to make acquisition more difficult. "Golden parachutes" protect managers from failure and make acquisition more difficult.
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Using Figure 10.2 determine the number of workers that a representative firm would wish to hire. Explain your answer
What will be an ideal response?
A change in any of the ceteris paribus conditions for demand leads to a
A) a good going from an inferior good to a normal good. B) movement along the demand curve. C) shift of the demand curve. D) change in supply.
Under the VAR assumptions, the OLS estimators are
A) consistent and have a joint normal distribution even in small samples. B) BLUE. C) consistent and have a joint normal distribution in large samples. D) unbiased.
Actual output can exceed the economy's potential both in the short run and the long run
a. True b. False Indicate whether the statement is true or false