Question

Under a Dutch auction, the company pays the same price to repurchase the shares of stock.

True

False

Answer 1

Under Dutch auction in an IPO, the share price is lowered until there is enough bid to sell all the shares and then all the shares are sold at that lowest price.

Under the Dutch auction, the company declares a range of price at which it is willing to buy back the specific number of shares. Then shareholders are paid the lowest price in the range at which it is able to repurchase the required amount of share.

Hence under a dutch auction, the company pays the same price to repurchase the shares of stock.

Thus the statement is TRUE.