Series 79 practice questionmediumManagement Buyouts
In a management buyout (MBO) of a public company, which board structure is commonly established to evaluate the transaction and protect minority shareholder interests?
- AAudit committee
- BEntire board of directors
- CCompensation committee
- DSpecial committee of independent directors✓ Correct answer
Explanation
Why D — Special committee of independent directors
A special committee of independent directors is typically established to review MBO proposals, ensuring process fairness and helping mitigate conflicts of interest. The full board or other committees may have inherent conflicts in MBOs.
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