Question

A hostile takeover is said to occur when another corporation or group of

investors gains voting control over a firm and replaces the old managers.
If the old managers were managing the firm inefficiently, then hostile
takeovers can improve the economy. However, hostile takeovers are
controversial, and legislative actions have been taken to make them more
difficult to undertake.
A) True
B) False

Answer 1

Hostile takeovers occur when a corporation or investors take control of a firm without management's consent, which can have both positive and negative economic impacts. Hostile takeovers are controversial, and legislation exists to limit them. Additionally, mergers and acquisitions are regulated by antitrust laws to ensure market competition. B. False.

Step-by-step explanation:

A hostile takeover is a scenario where a corporation or group of investors gains control over a firm without the consent of the firm's management, typically by purchasing a majority of its stock shares on the open market. You are correct in stating that hostile takeovers are controversial; they can lead to improvements in the economy if the prior management was operating the firm inefficiently, as the new owners may implement more effective strategies and improve operational efficiency.

Conversely, hostile takeovers may also lead to negative outcomes such as a clash of corporate cultures or strategic misalignment. Legislative actions to make hostile takeovers more difficult are in place to protect companies from such aggressive acquisitions and to maintain fair and competitive practices within the market. Moreover, the discussion of mergers and acquisitions is closely associated with antitrust laws, which aim to prevent the formation of monopolies and maintain active competition in the market.

Answer 2

true

Step-by-step explanation:

Hostile takeovers can improve a company's efficiency if old management was inefficient, but they're controversial, leading to legislative actions making them more difficult to execute.