Series 79 practice questioneasyFollow-On Offerings
Which of the following best describes a secondary offering?
- AShares are issued by the company for the first time in the public market
- BThe company issues debt securities instead of equity
- CThe shares are offered at a discount to market price by the issuer
- DExisting shareholders sell their shares to the public✓ Correct answer
Explanation
Why D — Existing shareholders sell their shares to the public
A secondary offering involves existing shareholders selling shares, not the company issuing new ones. This distinction affects proceeds and disclosure requirements.
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