Question

What does the green shoe option provide companies the

Q: Answer-What does the green shoe option provide companies the ability to do during the 30-day stabilisation...

The green shoe option, also known as an over-allotment option, allows companies to intervene in the market during the 30-day stabilisation period following their listing. This intervention involves purchasing equity shares from the market using a company-appointed agent if the share prices fall below the issue price. This mechanism is used to stabilize the share price and ensure a smoother transition for the companys shares in the market after their initial listing.

ability to do during the 30-day stabilisation period after listing?

A Sell additional shares above the issued quantity.

B Buy back shares from existing shareholders.

C Intervene to stabilize share prices through market purchases.

D Issue convertible bonds to raise capital.

E Split shares to increase market liquidity.

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