Question

meaning of dutch auction underwriting ?

meaning of dutch auction underwriting ?

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Answer #1

Dutch auction underwriting is a type of underwriting, under which all the bids are taken in advance in order to decide the offering price of a security.

All the bidding price are to be taken and then it is first to be allocated to all those who have issued for the highest bidding price and then it would be distributed in the descending order.

Features of Dutch underwriting as follows-

A . Underwriter accept series of bids that include number of shares and price per share

B. The price that everyone pays is the highest price, that result into the share being sold

C. This is an incentive to bid high, in order to make sure that you get in the auction process and then you will be allotted shares at a lower price than the bidding priceprice.

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