Suppose you own stocks of Company D, the current price is RM25 per share. Now Company Z is interested to acquire Company D at a price of RM35 per share. Company Ds management immediately begins to fight off this hostile bid. Discuss the action of the management in relation to shareholders best interests.(13 marks)

1. Option 1 : If management believes that it can increase the share price beyond RM35 via good managerial performance, then the management should fight or accept?
2. Option 2:If the management believes there is possibility that the bidder or other potential bidder is willing to pay more than RM35, then the management should fight or accept?
3. Option 3: If the management cannot increase the value of the firm beyond bid price and do not see any other potential bidder that is willing to bid higher, then management should fight or accept?

(For each scenario above, make your call and state how it is in shareholders best interest)