Business and Personal Finance Dictionary

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• GREEN SHOE
  
  Refers to an underwriting allotment which is in excess of the the first stipulated share amount. Depending on demand and/or market stabilizing functions, an underwriter can exercise this option for additional shares. Many new deals now have this option included. Usually, the green shoe is limited to an additional 15 percent of new shares. It was named after the company for which it was the focus of the deal.
  
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