SEC Rule 10b-18 allows an issuer to buy its shares in the open market:________.A. at any price that is reasonably related to the

Question

3 years ago

12

SEC Rule 10b-18 allows an issuer to buy its shares in the open market:________.A. at any price that is reasonably related to the

current marketB. at the highest independent bid or the last reported sale price, whichever is higherC. at the lowest independent offer or the last reported sale price, whichever is lowerD. under no circumstances, since this is considered to be market manipulation

Business

1 answer:

Mice21 [21] · Answer 1 · 2021-12-29T00:06:48+03:00

Answer:

B. at the highest independent bid or the last reported sale price, whichever is higher

Explanation:

SEC Rule 10b-18 was issued to create a safe harbor that reduces a company's possible legal liabilities related to repurchasing their own stock. Companies can decide to follow it or not, but if they follow it, they must comply with specific requirements that depend on the company's size and trading activities. Even if companies follow all the requirements of this "safe harbor", all legal liabilities are not eliminated, instead some specific provisions will not be considered to have been violated by the company.

The conditions related to this rule include

Manner of purchase conditions
Timing conditions
Price conditions
Volume conditions