Offer

DEFINITION of 'Offer'

1. When one party expresses interest to buy or sell an asset from another party. The offering price is often the highest the buyer will pay to purchase an asset, and the lowest that the seller will accept.

2. The act of making an asset available for sale.

BREAKING DOWN 'Offer'

1. There are many different types of offers, each of which has a distinct combination of features ranging from pricing requirements, rules and regulations, type of asset, and the buyer's and seller's motives.

For example, when purchasing a house, prospective buyers will make an offer to the seller, and will often list the highest price he or she is willing to pay. However, if another prospective buyer enters the scene and a bidding war ensues, each buyer will continue to bid until his or her maximum price level is attained.

2. Firms can offer a variety of things to the investment community. For example, when a firm has an equity or debt offering, it will offer shares or bonds to investors. Similarly, the company may offer rights to its shareholders, which allow them to purchase more stock.

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