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Answer :
Final answer:
The pro rata rule states that any increase in price paid for shares tendered must be offered to all shareholders, even those who have previously tendered their shares.
Explanation:
The pro rata rule, in the context of corporate law and finance, states that any increase in price paid for shares tendered must be offered to all shareholders, even those who have previously tendered their shares. This rule ensures fairness and equal treatment for all shareholders in the event of a share price increase. For example, if a shareholder initially tenders their shares at a certain price, and later the price increases, the pro rata rule requires that the shareholder be given the opportunity to receive the higher price. This rule is applicable in situations such as tender offers or rights offerings.
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