Secondary Market
A company makes a tender offer for 500,000 shares at $25. If 750,000 shares are tendered, how will the company handle the over-subscription?
When a tender offer is oversubscribed, shares are purchased on a pro-rata basis from all shareholders who tendered. In this case, 500,000/750,000 = 66.7% of each shareholder's tendered shares would be purchased. This ens
Complete Analysis & Legal Rationale
When a tender offer is oversubscribed, shares are purchased on a pro-rata basis from all shareholders who tendered. In this case, 500,000/750,000 = 66.7% of each shareholder's tendered shares would be purchased. This ensures fair treatment of all tendering shareholders.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing concept in the explanation.
Does not match the governing concept in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing concept in the explanation.
Official Standard: Secondary-market / antifraud framework including Section 10(b) (verify current text).
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.