Question: How does a toehold help overcome the free rider problem? (Select the best choice below) re dmurieahold n order to give an Incee for an
How does a toehold help overcome the free rider problem? (Select the best choice below) re dmurieahold n order to give an Incee for an acgulrer to take ower the remaindthcny and provide value aded B. Since the free riders gain the full amount of the value improvement on the shares acquired as a toehold, the free riders are likely to ell their shares to the C. Since tho acquirer gains the full amount of the value improvement on the shares acquired as a toehold, a toehold provides an incentive to undertake the acquirer, alowing the takeover to go forward acquisition, even if the acquirer must pay a price equal to the with-improvement value for the rest of the shares D. Once the acquirer has a toehold, free riders no longer can make as much money as they would have and are more likely to tender their shares to the acquirer
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