Chapter 13 Practice Questions
1. Ruddnucker’s Inc. operates a chain of casual dining establishments. Tired of complying with the onerous reporting requirements for public companies, management decides the company should go private, and Ruddnucker’s accordingly makes a tender offer to its existing shareholders. What schedules must Ruddnucker’s file with the SEC in connection with the contemplated transaction?
I. Schedule 14D-9
II. Schedule 13E-3
III. Schedule TO
IV. Schedule SR
A. I and IV
B. I and II
C. II and III
D. III and IV
2. A tender offer must be kept open for at least:
A. 15 calendar days
B. 20 business days
C. 40 business days from the date the offer is first communicated to shareholders
D. 10 business days from the date the company files a Schedule 14D-9 or Schedule TO
3. Each of the following is considered an unlawful tender offer practice except:
A. Extending the length of time a tender offer is open without giving public notice of the extension
B. Failing to pay the offered consideration or returning tendered securities promptly after the tender offer ends
C. Extending the length of time a tender offer is open without disclosing the approximate number of shares tendered to date
D. Making a tender offer for publicly traded shares for a price that is less than 95% of the market price at opening on the day the tender offer is made
4. Y Corporation has 30 million shares issued and outstanding. Company X makes a tender offer for 21 million shares of Y Corporation. Under those circumstances, which of the following is not true?
A. Y Corporation’s management must recommend acceptance or rejection of the tender offer within 10 days of the offer.
B. While the tender offer is pending, Company X may not arrange to purchase shares of Y Corporation except as part of the tender offer.
C. A person may not tender a security unless the person has a net long posit