Series 79 practice questioneasyTender Offer Rules
Under the all-holders/best-price rule for tender offers, which of the following must be true?
- AAll shareholders must be offered the same price per share during the tender offer period.✓ Correct answer
- BOnly institutional shareholders are entitled to the best price.
- CDifferent prices can be paid if shareholders tender at different times.
- DPreferred shareholders must receive a higher price than common shareholders.
Explanation
Why A — All shareholders must be offered the same price per share during the tender offer period.
The all-holders/best-price rule requires that all shareholders of the same class receive the same price. Differentiating by timing or shareholder type would violate the rule and risk regulatory action.
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