Distinguishing Characteristic of Tender Offers

Very Easy Dividends And Repurchases Share Repurchase Methods

In the context of corporate finance, firms often utilize share repurchase methods as a way to return capital to shareholders. One of the primary methods for executing a share repurchase is through a type of tender offer. In a tender offer, a company offers to buy back shares from shareholders at a specified price that is usually at a premium to the current market price.

What is a distinguishing characteristic of a tender offer compared to other share repurchase methods?

A tender offer is conducted through open market purchases.

A tender offer specifies a price and a number of shares the company wishes to repurchase.

A tender offer typically does not set a fixed price for the shares.

Hint

Submitted10.3K

Correct9.7K

% Correct94%