Consider the procedure whereby the firm states a series of prices at which it is prepared to repurchase stock. Shareholders then submit offers indicating how many shares they wish to sell and at which price. The firm then calculates the lowest price at which it is able to buy the desired number of shares. This procedure is known as a(n)
A)open market repurchase.
B)Dutch auction.
C)green mail.
D)tender offer.

Question

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The procedure described is a Dutch auction, where the firm sets a range of prices and shareholders submit offers indicating the amount of shares they wish to sell at a certain price. The firm then determines the lowest price at which it can buy the desired number of shares. Open market repurchase, green mail, and tender offer all involve different processes for repurchasing stock.

Consider the Procedure Whereby the Firm States a Series of Prices