Mechanisms available to firm for repurchasing shares

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Reference no: EM131838289

Describe the different mechanisms available to a firm for repurchasing shares.

There are three? mechanisms: (Select the best choice? below.)

1) In an open market? repurchase, the firm repurchases the shares in the open market. This is the most common mechanism in the United States.

2) In a tender? offer, the firm announces the intention to all shareholders to repurchase a fixed number of shares for a fixed? price, conditional on shareholders agreeing to tender their shares. If not enough shares are? tendered, the deal can be cancelled.

3) In a tender? offer, the firm announces the intention to repurchase a fixed number of shares for a fixed? price, conditional on shareholders agreeing to tender their shares. Even if not enough shares are? tendered, the firm is obligated to repurchase the shares that are tendered.

4) A targeted repurchase is similar to a tender offer except that it is not open to all? shareholders; only specific shareholders can tender their shares in a targeted repurchase.

Reference no: EM131838289

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