Welcome, daring finance aficionados, to the rollicking roller-coaster ride that is Offer for Sale! 🌟 Fasten your seatbelts and keep your calculators close, for this journey weaves through the golden lanes of the stock market. 🛤️ Curious to explore how companies invite you, the general superhero public, to join their thrilling stock game? Then read on!
🧐 What is Offer for Sale?
Ah, Offer for Sale – the grand stage where companies, decked out in their finest, beckon the investing public to purchase their stock through intermediaries like issuing houses or merchant banks. Think of it as a royal invitation but with dollar signs! 💸 Here’s the official accountoid definition: an invitation to the general public to purchase the stock of a company through an intermediary, such as an issuing house or merchant bank.
🔄 Public Issues vs. Issuing by Tender 🔍
Two flavors for your stock-flavored ice cream cone! Let’s unravel this deliciousness:
🍦 Public Issue
This is the default crowd-pleaser – the company offers stocks at a fixed price. It’s like a bake sale, but everyone wants the same rare pie, so we might need balloting or rationing if demand exceeds supply. Picture Grandma rationing those walnut brownies at Thanksgiving –
### What is an Offer for Sale?
- [ ] A. A stock’s sell used car ad
- [ ] B. An invitation to the public to purchase company stock through intermediaries
- [ ] C. Your aunt's annual garage sale
> **Explanation:** An Offer for Sale is about inviting the public to purchase stocks through intermediaries.
### In which method are stocks offered at a fixed price?
- [ ] A. Public Issue
- [ ] B. Issue by Tender
> **Explanation:** Under a Public Issue, stocks are offered at a fixed price.
### What happens if the demand for shares exceeds supply?
- [ ] A. The baker makes more
- [ ] B. Rationing or balloting
- [ ] C. Everyone gets a free share
> **Explanation:** When demand exceeds supply, stocks are rationed or balloted.
### Which method involves participants bidding a price?
- [ ] A. Public Issue
- [ ] B. Issue by Tender
> **Explanation:** Issue by Tender involves participants bidding a price.
### Who allocates the stock in an Issue by Tender?
- [ ] A. The lowest bidders
- [ ] B. The highest bidders
- [ ] C. The mailman
> **Explanation:** Stocks are allocated to the highest bidders in an Issue by Tender.
### What intermediary can help in an Offer for Sale?
- [ ] A. Issuing house
- [ ] B. A friendly neighbor
- [ ] C. A magician
> **Explanation:** Issuing houses and merchant banks assist in Offers for Sale.
### What’s the purpose of an Offer for Sale?
- [ ] A. Company's expansion and innovation
- [ ] B. To cause confusion
- [ ] C. To hoard stocks
> **Explanation:** Offers for Sale help companies with expansion and innovation.
### Which scenario requires balloting?
- [ ] A. Issue by Tender
- [ ] B. Public Issue
- [ ] C. Ice cream tasting
> **Explanation:** Public Issue requires balloting if demand exceeds supply.
