What defines an Issuer Bid?

• A. Offers from a company to its shareholders to repurchase securities
• B. Investment offers to the public for new shares
• C. Requests for shareholder votes on company changes
• D. Proposals for mergers with other firms

Answer: (A)

An Issuer Bid is defined as offers made by a company to its shareholders to repurchase securities. This process is often used by companies to buy back outstanding shares, which can be a strategic move to increase shareholder value, improve financial ratios, or reduce the number of shares available in the market. By repurchasing shares, the company can potentially raise the value of remaining shares due to reduced supply or convey confidence in its financial health to the market.

The other options represent different financial activities that do not align with the definition of an Issuer Bid. Investment offers to the public for new shares pertain to initial public offerings or secondary offerings, which are distinct from the repurchase mechanism. Requests for shareholder votes on company changes are related to corporate governance and decision-making rather than specific financial transactions like an Issuer Bid. Proposals for mergers with other firms involve strategic business decisions outside the scope of share repurchase offers. Thus, the definition of an Issuer Bid exclusively relates to the act of a company offering to buy back its own securities from shareholders.