1 Once upon a time, when you bought broccoli you bought the whole vegetable, stems and crowns. Then it became customary for grocery store produce departments to separate the crowns from the stems and to sell the crowns at a premium. 2  Iâm not a fan of this practice, because I like both parts of the broccoli plant.
A company's first issue of common stock to the public is called an Initial Public Offering. Afterwards, a corporation may issue new equity at any time in order to finance its growth. When new common shares are offered to existing shareholders first, this is called a rights offering.
The Costs of Issuing Equity. Spread: The difference between the price that the underwriter pays the issuing company for each new security and the price that the underwriter resells the security at is known as the spread. The spread is considered to be a direct expense incurred from issuing the new equity.