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In an equity offering that consists entirely of secondary shares, who receives the proceeds?

  1. A. The selling shareholders, not the companyCorrect
  2. B. The company, for general corporate purposes
  3. C. The underwriting banks
  4. D. The stock exchange where the shares list

Takeaway. Primary shares fund the company; secondary shares cash out existing holders, so follow the share type to follow the money.

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