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Greenmail is an offer by a company, threatened by takeover, to offer its stock at a reduced price to a third party. (True/False)

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Final answer:

Greenmail is falsely defined in the statement; it is actually when a company buys back its shares at a premium from a potential acquirer to avert a takeover, not offering stock at a reduced price to a third party.

Step-by-step explanation:

The statement 'Greenmail is an offer by a company, threatened by takeover, to offer its stock at a reduced price to a third party' is False. Greenmail refers to a situation where a company pays a premium to buy back its own shares from a potential acquirer to prevent a takeover attempt. This potential acquirer has usually accumulated a significant share in the company and is threatening a takeover. The company pays a premium over the market price for the shares, which is beneficial for the acquirer but can be seen as detrimental to the company and its other shareholders.

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