Question

Suppose Bill Gates, founder of Microsoft, is interested in a small software company. He may offer to purchase the stock of this company at a price that is just high enough to tempt the current stockholders. This action would be called a

Answer 1

The action taken by Bill Gates in acquiring the shares of a small software company is called a tender offer.

What is a tender offer?

A tender offer is a type of offer given by an investor in respect of purchasing the shares of a public entity at a value within a defined period.

When Bill Gates offered to take over the shares of a small software entity at a cost that can attract the share investors to sell them off in the market. This action of Bill Gates tends to initiate a tender offer for the shareowners of the software entity.

Therefore, the tender offer is the action being taken by the founder of Microsoft company.

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