Question #21
Reading: Reading 15 Analysis of Dividends and Share Repurchases
PDF File: Reading 15 Analysis of Dividends and Share Repurchases.pdf
Page: 9
Status: Unattempted
Correct Answer: A
Question
Laura's Chocolates, Inc. (LC), is a maker of nut-based toffees. LC is considering a share repurchase and prefers the "tender offer" method. Which of the following is also known as a "tender offer"?
Answer Choices:
A. Buying a fixed number of shares at a fixed price
B. Buying in the open market
C. Repurchasing by direct negotiation
Explanation
A tender offer refers to buying a fixed number of shares at a fixed price (usually at a
premium to the current market price).