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Poison pill defence works by:
ARepurchasing all minority shareholdings
BPaying a premium dividend to all shareholders
CIssuing rights that dilute hostile acquirer's stake once trigger crosses threshold
DSplitting the company into two independent listings (within the standard regulatory framework)
Answer & Solution
Correct answer: C. Issuing rights that dilute hostile acquirer's stake once trigger crosses threshold
1. Identify what the question asks: this concept maps to poisonpill (§5.2).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (C).
_Source: ICAI BoS CA Final Paper 2, Ch 14 "Mergers Acquisitions and Corporate Restructuring"_
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