Series 79 practice questionmediumFairness Opinions
Which of the following is an important limitation that should be disclosed in a fairness opinion?
- AThe board’s composition
- BThe target’s PR strategy
- CDoes not address merits of alternative transactions✓ Correct answer
- DThe company’s dividend policy
Explanation
Why C — Does not address merits of alternative transactions
Fairness opinions typically disclaim evaluation of alternatives, focusing only on the fairness of the specific deal. The trap is assuming fairness opinions cover all strategic options.
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