Question

A new issuance of stock by a firm that does not already have stock outstanding is referred to as: a. ADR b. seasoned offering c. rights offering d. initial public offering

Answer 1

Option a, ADR or American Depository Receipt is a negotiable certificate issued by a US depository bank representing investment in foreign shares.

Option b, seasoned offering refers to an issue of additional shares by a public company whose shares are traded in the secondary market.

Option c, rights offering is an issuance of rights to existing shareholders of a company to purchase additional shares at a discount.

Option d, initial public offering refers to an issue of shares for the first time to raise new capital.

Hence, the answer is option d.

In case of any query, kindly comment on the solution.