Describe the different mechanisms available to a firm for repurchasing shares.

There are three mechanisms: (Select the best choice below.)

A.1) In an open market repurchase, the firm repurchases the shares in the open market. This is the most common mechanism in the United States.

B. 2.In a tender offer, the firm announces the intention to all shareholders to repurchase a fixed number of shares for a fixed price, conditional on shareholders agreeing to tender their shares. If not enough shares are tendered, the deal can be cancelled.

C.3.In a tender offer, the firm announces the intention to repurchase a fixed number of shares for a fixed price, conditional on shareholders agreeing to tender their shares. Even if not enough shares are tendered, the firm is obligated to repurchase the shares that are tendered.

D4) A targeted repurchase is similar to a tender offer except that it is not open to all shareholders; only specific shareholders can tender their shares in a targeted repurchase.