Series 79 practice questioneasyTender Offer Rules
Under the all-holders/best-price rule, which of the following must an issuer ensure in a tender offer?
- AOnly the largest shareholders receive the highest price
- BAll shareholders receive the same price per share in the tender offer✓ Correct answer
- CHolders of preferred stock receive a premium over common stockholders
- DThe board must recommend the highest bidder
Explanation
Why B — All shareholders receive the same price per share in the tender offer
The all-holders/best-price rule requires that every shareholder of the same class receives the same price per share in a tender offer. This rule prevents discrimination among shareholders and is a key aspect of tender offer fairness.
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