A problem with the tender offer mechanism in a takeover is the . The t

A problem with the tender offer mechanism in a takeover is the . The term refers to a situation in which rational behavior by each individual shareholder results in shareholders as a group being worse off.

If individual target shareholders (correctly) foresee that the value of their shares will be worth more after the takeover than they will receive in the tender offer, they will choose not to tender their shares.
a. holdover problem
b. free rider problem
c. holdout problem
d. non-tender problem

ANSWER

B