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wrightjb wrightjb
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4 years ago
Which of the following best describes a firm commitment IPO?

▸ The underwriter purchases the entire issue at a small discount and then resells it at the offer price.

▸ The underwriter sells new issues directly to the public in an online auction.

▸ The underwriter solicits bids from investors and chooses the highest price at which there is sufficient demand to sell the entire issue.

▸ The underwriter tries to sell the stock for the best possible price but does not guarantee that the stock will be sold.
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Fundamentals of Corporate Finance

Fundamentals of Corporate Finance


Edition: 2nd
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#1
4 years ago
The underwriter purchases the entire issue at a small discount and then resells it at the offer price.
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