SIE (Securities Industry Essentials) Practice Exam

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A company announces a tender offer to its shareholders with the intent to buy a maximum of 1 million shares of its outstanding stock at $10 per share and sets no minimum number of shares to be purchased. How many of the investor's shares will the company purchase if only 900,000 shares have been tendered?

1,000
900
None
It cannot be determined from the information provided

The correct answer is: 1,000

If only 900,000 shares have been tendered, the company can still purchase the maximum of 1 million shares at $10 per share, since there is no minimum set. Therefore, they will purchase 1,000 shares (1 million - 900,000 = 100,000 shares remaining). Option B (900) is incorrect because the company can still purchase more than 900 shares. Option C (None) is incorrect because the company has not reached the maximum limit of 1 million shares. Option D (It cannot be determined from the information provided) is incorrect because the answer can be determined based on the given information.