Suppose Bill Gates, founder of Microsoft, is interested in a small software company. He may offer to purchase the stock of this company at a price that is just high enough to tempt the current stockholders. This action would be called a
A) monopoly.
B) tender offer.
C) proxy fight.
D) hostile takeover.
E) white knight offer.

Question

Quizplus · Accepted Answer

The action described in the scenario is a tender offer, which is an offer made by a potential buyer to purchase the stock of a company at a premium price in order to persuade stockholders to sell their shares. A monopoly is a situation where a single entity controls the market for a particular good or service, and is not relevant to the scenario. Proxy fights and hostile takeovers involve more aggressive tactics, such as attempting to gain control of the company's board of directors or making a direct bid to acquire the company without the approval of the current management. A white knight offer would involve a third party offering to acquire the company in order to prevent a hostile takeover.

Suppose Bill Gates, Founder of Microsoft, Is Interested in a Small