CFA Level I · CFA Level I Exam · Equity Issuance and Trading
A listed company with existing shares outstanding offers new shares to the public at a price close to the current market price. This offering is best described as a:
This is a seasoned offering, also called a follow-on offering, because an already listed company is selling additional shares to the public in the primary market. An IPO applies only to the first public sale, and a private placement is not made to the general public.
- Ainitial public offering
- Bseasoned offeringCorrect
- Cprivate placement
Explanation
A seasoned (follow-on) offering is a sale of additional shares by a company already publicly listed. An IPO is the first sale to the public by a private company. A private placement is sold to a small group of qualified investors rather than the public.
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