Within the context of a stock repurchase, what is meant by a tender offer?
What will be an ideal response?
If management intends to repurchase a block of the firm's outstanding shares three methods for stock repurchase are
available. First, the shares can be bought in the open market. The second method is to make a tender offer to the firm's
shareholders. A tender offer is a formal offer by the company to buy a specified number of shares at a predetermined
and stated price. The tender price is set above the current market price in order to attract sellers. A tender offer is best
when a relatively large number of shares are to be bought because the company's intentions are clearly known and
each shareholder has the opportunity to sell the stock at the tendered price. The third and final method for
repurchasing stock entails purchase of the stock from one or more major stockholders. These purchases are made on a
negotiated basis. Care should be taken to ensure a fair and equitable price; otherwise, the remaining stockholders may
be hurt as a result of the sale.
You might also like to view...
A company in which an ethnocentric orientation prevails is likely to utilize primarily ________ in its sales force
A) host-country nationals B) third-country nationals C) expatriates D) agents of any nationality E) agents of host country
When using the allowance method, what are the effects on the accounting equation when a company writes off a bad debt?
a. Assets and stockholders' equity increase. b. Assets and stockholders' equity decrease. c. Assets increase and stockholders' equity decreases. d. No effect on overall assets or equity.
Independent Grocers Alliance, Do-It Best, and Western Auto are examples of ________
A) franchise organizations B) warehouse clubs C) voluntary chains D) category killers E) wholesale clubs
Tropicana Essentials Healthy Heart targets consumers who like orange juice and who also want extra vitamins but no sodium. Explain how Tropicana uses behavioral segmentation in this example
What will be an ideal response?