A Tender Offer Is One in Which the Firm's

question 8

Multiple Choice

A tender offer is one in which the firm's:

• A) management offers to sell the company to an acquirer.
• B) board of directors offers to sell the company to the public.
• C) shareholders are propositioned to sell their shares to outsiders.
• D)management offers to buy all outstanding shares of the corporation.

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Definitions:

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase an asset at a specified price within a specific time period.

Put

A put is an options contract giving the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price before the contract expires.

Option

A financial contract granting the buyer the right, but not the obligation, to buy or sell an asset at a set price within a specific time.

Asian Options

A type of option where the payoff depends on the average price of the underlying asset over a certain period of time rather than at maturity.