Series 79 practice questionmediumFairness Opinions
Which board process is most consistent with procedural fairness when obtaining a fairness opinion?
- ARequiring only majority approval by interested directors
- BEngaging an independent financial advisor unaffiliated with the transaction parties✓ Correct answer
- CAllowing management to prepare the fairness opinion
- DSoliciting fairness opinions from only the buyer’s advisors
Explanation
Why B — Engaging an independent financial advisor unaffiliated with the transaction parties
An independent advisor ensures procedural fairness and objectivity in fairness opinions. The trap is thinking management or buyer-prepared opinions are sufficient.
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