I’m a novice stepping into finance. I’ve been watching a REIT, AVB. It’s on the cusp of compliance based on zoya. Others permit. I have not purchased. Either way this stock entered into a forward stock sale of 2 million shares. I’m not understanding if this is adding new shares which would increase the market cap and impact the debt to equity ratio. Alternatively seems like the company also not issue additional shares. Can someone explain and
Sorry. I think there are at least two options I see. The forward sale is for 2 million shares @ 248.6. That nets about 500 million. The shares currently trade at 170. Presumably the company would elect to issue additional shares (I think). If I’m understanding correctly they could also borrow money for 2 million shares at the current price and then not issue additional shares. Is that correct? Is there a reason for a REIT to prefer one option over another. Both have implications for aaofi compliance rules. But I don’t think they take those into account when making a decision