State and explain the methods of obtaining a listing on the stock exchange

CPA-Financial-Management-Section-3 Revision kit

Methods of obtaining a listing at the stock exchange:
 Offer for subscription: Can be fixed or by tender and occurs where the issuing authority offers the shares directly to the public using an intermediary.

Placing: A sponsor buys the whole issue and then determines terms for sale to its own clients. Any unplaced shares are sold to a second broker known as an intermediary.

Introduction: Method available to companies that already have a good spread of shareholders or companies already quoted on an overseas exchange.

Tender offer: Where shares are subscribed for using a bidding system.

Leave a Reply

Your email address will not be published. Required fields are marked *