Series 79 practice questionmediumFollow-On Offerings
In an at-the-market (ATM) follow-on program, how are shares typically sold to investors?
- AShares are sold directly into the secondary market at prevailing prices over time.✓ Correct answer
- BShares are sold at a fixed price negotiated in advance with all investors.
- CAll shares are sold in a single block transaction to one purchaser.
- DShares are auctioned at a single closing price each day.
Explanation
Why A — Shares are sold directly into the secondary market at prevailing prices over time.
ATMs involve selling shares incrementally at market prices, rather than at a fixed or auction price. The trap is confusing ATMs with block trades or fixed-price offerings.
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