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A company afraid of a takeover bid, wanting no dilution of control, will prefer:
APreference shares only
BDebt over equity
CEquity over debt
DBonus shares only
Answer & Solution
Correct answer: B. Debt over equity
1. More equity dilutes management control.
2. Debt has no such implication.
3. So such a company prefers debt.
_Source: NCERT Class 12 Business Studies Part II, Chapter 9, Financial Management._
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