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Dutch auction |
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Dutch auctionAuction in which the lowest price necessary to sell the entire offering becomes the price at which all securities offered are sold. This technique has been used in Treasury auctions. Often used in risk arbitrage. Auction system in which the price of an item (stock) is gradually lowered until it meets a responsive bid (government T-bills) or offer (corporate repurchase) and is sold. In a corporate repurchase, a range of prices is set by the company within which shareholders are invited to tender their shares. The tender offer is open for a specific period of time (i.e., 20 days), and the quantity of stock to be purchased is stated as well, subject to proration if more shares are tendered than can be legally purchased under the stated terms (often an additional amount equal to 20% of outstanding shares can be purchased). The price paid is that at which the amount stated to be purchased can be sold. Compare to double auction system.Dutch auctionAn auction of multiple identical items in which the winning bidder pays the price bid by the lowest successful bidder. For a contrasting system, see 'Yankee auction'.Similar MatchesYankee auctionYankee auctionAn auction of multiple identical items in which the winning bidders pay the prices that they have bid. For a contrasting system, see 'Dutch auction'. Auction marketsAuction marketsMarkets in which the prevailing price is determined through the free interaction of prospective buyers and sellers, as on the floor of the stock exchange. Auction rate preferred stock (ARPS)Auction rate preferred stock (ARPS)Floating-rate preferred stock, whose dividend is adjusted every seven weeks through a Dutch auction. Double auction marketDouble auction marketSystems by which listed securities are bought and sold through brokers on the securities exchanges, as distinguished from the OTC market, where trades are negotiated. Unlike the conventional auction with one auctioneer and many buyers, double auction markets consist of many sellers and many buyers. Dutch Auction Preferred StockDutch Auction Preferred StockA form of adjustable-rate preferred stock in which the dividend is ascertained in a Dutch Auction process by corporate bidders every seven weeks. Further SuggestionsDouble auction systemWalrasian auctioneer Auction Market Preferred Stock (AMPS) Periodic call auction |
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