Which of the Following Is Not True Regarding Overallotment Options

question 38

Multiple Choice

Which of the following is not true regarding overallotment options?

• A) Overallotment options are rarely used in IPOs today.
• B) An overallotment option allows the lead underwriter to allocate an additional 15 percent of the shares of a firm engaging in an IPO.
• C) The option allows the lead underwriter to purchase additional shares at the offer price.
• D) The lead underwriter may use the shares from an overallotment option to help stabilize the stock price in the days after the IPO.

---

Definitions:

Organic Compounds

Chemical compounds made primarily of carbon atoms bonded with hydrogen, oxygen, and other elements, typically found in living organisms.

Topsoil Horizon

The topsoil horizon is the uppermost layer of soil, rich in organic matter and microorganisms, playing a critical role in plant growth and soil fertility.

A Horizon

The uppermost layer of soil, often referred to as topsoil, where organic material accumulates and decomposes.

Name

A word or set of words by which a person, place, or thing is known, addressed, or referred to.