Denver Liquid Wholesalers recently offered 50,000 new shares of stock for sale.The underwriters sold a total of 53,000 shares to the public.The additional 3,000 shares were purchased in accordance with which one of the following?

Question

Quizplus · Accepted Answer

The additional 3,000 shares were purchased via the green shoe provision, which allows the underwriters to sell more shares than originally planned, up to a certain amount (in this case, 3,000). This is often used when there is more demand for the stock than anticipated.

Denver Liquid Wholesalers Recently Offered 50,000 New Shares of Stock