What is a Green Shoe Provision, a Secondary Offering and Rights in a Secondary Offering?
Green shoe Provision : This provision allows underwritter to buy upto addtional 15% of shares of company if the response to the issue exceeds their expectation. Generally they have right to exercise this option
Secondary Offering : It is issuance of new shares to public by a company that alraedy has made initial public offering. There are two types of secondary offering
1) Non dilutive secondary offering and 2) Dilutive secondary offering
Rights: Non dilutive secondary offerening does not dilute holding of existing shrare holders thus this provide them with required capital without giving up ownership of company
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