What is an 'at-the-market' (ATM) offering?
- AAn offering conducted through ATM machines at bank branches
- BA secondary offering by insiders at the market close
- CAn offering priced at exactly the current market price with no discount
- DIncremental at-market sales through a broker-dealer✓ Correct answer
Why D — Incremental at-market sales through a broker-dealer
An at-the-market (ATM) offering allows a company to sell shares incrementally into the public trading market at prevailing market prices through a designated broker-dealer acting as sales agent. ATM programs are established under shelf registration statements and offer flexibility because the issuer controls the timing and amount of shares sold. ATMs avoid the significant discount typically associated with traditional follow-on offerings and are well-suited for companies that need to raise capital over time. The sales agent typically receives a commission of 2-3% of proceeds.
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