Describe the different mechanisms available to a firm for repurchasing shares. There are three mechanisms: (Select the best choice below.) A. 1) In an open market repurchase, the firm repurchases the shares in the open market. This is the most common mechanism in the United States. B. 2) In a tender offer, the firm announces the intention to repurchase a fixed number of shares for a fixed price, conditional on shareholders agreeing tender their shares. Even if not enough shares are tendered, the firm is obligated repurchase the shares that are tendered. C. 2) In a tender offer, the firm announces the intention to all shareholders to repurchase a fixed number of shares for a fixed price, conditional on shareholders agreeing to tender their shares. If not enough shares are tendered, the deal can be cancelled. D. 3) A targeted repurchase is similar to a tender offer except that it is not open to all shareholders; only specific shareholders can tender their shares in a targeted repurchase.
Describe the different mechanisms available to a firm for repurchasing shares. There are three mechanisms: (Select the best choice below.) A. 1) In an open market repurchase, the firm repurchases the shares in the open market. This is the most common mechanism in the United States. B. 2) In a tender offer, the firm announces the intention to repurchase a fixed number of shares for a fixed price, conditional on shareholders agreeing tender their shares. Even if not enough shares are tendered, the firm is obligated repurchase the shares that are tendered. C. 2) In a tender offer, the firm announces the intention to all shareholders to repurchase a fixed number of shares for a fixed price, conditional on shareholders agreeing to tender their shares. If not enough shares are tendered, the deal can be cancelled. D. 3) A targeted repurchase is similar to a tender offer except that it is not open to all shareholders; only specific shareholders can tender their shares in a targeted repurchase.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Describe the different mechanisms available to a firm for repurchasing shares.
There are three mechanisms: (Select the best choice below.)
A. 1) In an open market repurchase, the firm repurchases the shares in the open market. This is the most common mechanism in the United States.
B. 2) In a tender offer, the firm announces the intention to repurchase a fixed number of shares for a fixed price, conditional on shareholders agreeing to tender their shares. Even if not enough shares are
tendered, the firm s obligated to repurchase the shares that are tendered.
C. 2) In a tender offer, the firm announces the intention to all shareholders to repurchase a fixed number of shares for a fixed price, conditional on shareholders agreeing to tender their shares. If not enough
shares are tendered, the deal can be cancelled.
D. 3) A targeted repurchase is similar to a tender offer except that it is not open to all shareholders; only specific shareholders can tender their shares in a targeted repurchase.
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