Which of the following methods can be utilized by a firm when it wants to purchase outstanding shares of common stock?
A) a purchase of stock through private placement
B) a tender offer at varying prices
C) a tender offer at a specified price
D) an European auction plan

Question

Quizplus · Accepted Answer

A firm can utilize a tender offer at a specified price to purchase outstanding shares of common stock. This involves a public offer to buy shares from existing shareholders at a stated price per share. Shareholders have the choice to accept or reject the offer. A private placement involves the sale of securities to a select group of investors and is not a method of purchasing outstanding shares of common stock. A tender offer at varying prices and an European auction plan are not commonly used methods for purchasing outstanding shares of common stock.

Which of the Following Methods Can Be Utilized by a Firm