Which of the following best describes a best efforts underwriting commitment? 1. Underwriter is only responsible...
Which of the following best describes a best efforts
underwriting commitment?
1. Underwriter is only responsible for half (50%) of
the issue.
2. The underwriter agrees to buy the entire issue and assume full
financial responsibility for any unsold shares.
3. If the entire issue cannot be sold at the offering price, the deal is called off and the issuing company receives nothing.
4. Underwriter commits to selling as much of the issue as possible at the agreed-on offering price but can return any unsold shares to the issuer without financial responsibility.
Homework Answers
Ans
2. The underwriter agrees to buy the entire issue and assume full financial responsibility for any unsold shares.
Reason:-
Underwriter commits to take any unsold share as per the agreement with the company.
.
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Which of the following best describes a best efforts
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