Series 79 practice questioneasyTypes of Offerings
In a secondary offering, who receives the proceeds when existing shareholders sell stock?
- AThe issuer only
- BFINRA
- CThe selling shareholders, not the issuer✓ Correct answer
- DThe stabilizing manager
Explanation
Why C — The selling shareholders, not the issuer
The selling shareholders, not the issuer A secondary sale monetizes existing holders’ shares, so the company does not receive the cash. That differs from a primary offering, where proceeds go to the issuer.
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