The _____ gives the investment bank the right to buy 15 percent more shares within the next 30 days.

Question

Quizplus · Accepted Answer

The overallotment option, also known as the greenshoe option, is a provision that allows the underwriters to sell an additional 15% of shares beyond the initial public offering (IPO) if there is high demand from investors. It helps the investment bank manage the supply and demand of the stock, and if exercised, allows for more shares to be offered to the market.

The _____ Gives the Investment Bank the Right to Buy