all winning bidders determine the offer price in a dutch auction.
all winning bidders determine the offer price in a dutch auction.
who determines the offer price in a dutch auction?
all winning bidders
bullet::::- dutch auction also known as an "open descending price auction". in the traditional dutch auction the auctioneer begins with a high asking price for some quantity of like items; the price is lowered until a participant is willing to accept the auctioneer's price for some quantity of the goods in the lot or until the seller's reserve price is met. if the first bidder does not purchase the entire lot, the auctioneer continues lowering the price until all of the items have been bid for or the reserve price is reached. items are allocated based on bid order; the highest bidder selects their item(s) first followed by the second highest bidder, etc. in a modification, all of the winning participants pay only the last announced price for the items that they bid on. the dutch auction is named for its best known example, the dutch tulip auctions. ("dutch auction" is also sometimes used to describe online auctions where several identical goods are sold simultaneously to an equal number of high bidders.) in addition to cut flower sales in the netherlands, dutch auctions have also been used for perishable commodities such as fish and tobacco. the dutch auction is not widely used, except in market orders in stock or currency exchanges, which are functionally identical.
auction
the introduction of the dutch auction share repurchase in 1981 gives firms an alternative to the fixed price tender offer when executing a tender offer share repurchase. the first firm to use the dutch auction was todd shipyards. a dutch auction offer specifies a price range within which the shares are purchased. shareholders can choose to tender their stock at any price within the stated range. the firm compiles these responses, creating a supply curve for the stock. the purchase price is the lowest price that allows the firm to buy the number of shares sought in the offer, and the firm pays that price to all investors who tendered at or below that price. if the number of shares tendered exceeds the number sought, the company purchases less than all shares tendered at or below the purchase price pro rata to all who tendered at or below the purchase price. if too few shares are tendered, then the firm either cancels the offer (provided it had been made conditional on a minimum acceptance), or it buys back all tendered shares at the maximum price.
dutch auction