A formal proposal to purchase a given number of shares of a firm's stock at a specified price is a
A) warrant.
B) tender offer.
C) stock purchase option.
D) right.

Question

Quizplus · Accepted Answer

A formal proposal to purchase a given number of shares of a firm's stock at a specified price is called a tender offer. A warrant is a security granting the holder the right to buy underlying stock at a fixed price for a specified time period. A stock purchase option is an agreement between a company and a buyer that grants the buyer the option to buy shares of the company's stock at a certain price for a certain period. A right is a privilege granted to stockholders to subscribe for new issues of stock in proportion to their existing holdings.

A Formal Proposal to Purchase a Given Number of Shares