Assume You Are the Financial Manager for a Company

question 23

Multiple Choice

Assume you are the financial manager for a company.It has come to your attention that a competitor will soon make a takeover bid for your company.The offer is likely to include a substantial premium on the current share price.What is the effect of buying shares in your company today?

• A)You stand to lose money if the share price falls.
• B)Other market participants might get a 'hint' of the takeover bid.
• C)You could make a profit when the takeover bid was made.
• D)You would commit an offence under the Corporations Act 2001.

---

Definitions:

Registration Statement

A set of documents filed with the Securities and Exchange Commission that includes material information about a company planning an initial public offering of its securities.

Reasonably Competent Accountant

Refers to an accountant who possesses the average level of skill and knowledge expected of a professional in the accounting field.

Negligence

Negligence is a failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, leading to unintentional harm or damage.

Audit Reports

Formal opinions or evaluations by auditors regarding the accuracy and completeness of a company's financial statements.