Series 79 practice questioneasyFairness Opinions
A fairness opinion in the context of an M&A transaction is typically provided by:
- AThe target company's independent auditor
- BAn independent investment bank or financial advisor✓ Correct answer
- CThe SEC's Division of Corporation Finance
- DThe acquiring company's legal counsel
Explanation
Why B — An independent investment bank or financial advisor
A fairness opinion is a professional assessment provided by an independent investment bank or financial advisor that evaluates whether the consideration offered in a transaction is fair, from a financial point of view, to a specified group of shareholders. The opinion is addressed to the board of directors, not to individual shareholders. It serves to support the board in fulfilling its fiduciary duties by demonstrating that an independent financial expert has reviewed the transaction terms.
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