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Answer :
Final answer:
The officers of the company, subject to insider trading laws and duties to their shareholders, might have several options: buying additional shares, selling to the tender offeror, abstaining from the tender offer, or rejecting the offer on behalf of the company.
Explanation:
If a tender offer is being made for 10% of the outstanding shares of a company, the officers of that company can:
- Buy additional shares to protect their interests.
- Sell their shares to the tender offeror.
- Not participate in the tender offer.
- Reject the tender offer on behalf of the company.
In a public company, shareholders own the firm and vote for a board of directors, who in turn hire top executives. The executives run the day-to-day operations and make decisions on behalf of shareholders. For example, when a company goes public through an initial public offering (IPO), it raises capital for the firm and transitions ownership from private investors to the public. The amount of stock a shareholder owns corresponds to the number of votes they can cast for the company's board.
Answering the question, the officers of the company may technically be able to do any of the options depending on the circumstances and their roles within the company, as well as applicable laws and corporate governance rules. However, officers are typically restricted in their responses to tender offers due to their inside knowledge and fiduciary responsibilities.
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