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Homework answers / question archive / Under this type of agreement to sell shares, the firm will negotiate with the investment bank that the shares will be sold to the syndicate of underwriters at a specified price and the shares will be sold to the public at a higher price
Under this type of agreement to sell shares, the firm will negotiate with the investment bank that the shares will be sold to the syndicate of underwriters at a specified price and the shares will be sold to the public at a higher price.
a. Best-effort Cash Offer
b. Guaranteed Commitment Offer.
c. Dutch Auction
d. Firm Commitment
e. Cash Payment Offering
Answer - d. Firm Commitment
Reason- Firm Commitment is an agreement where the firm negotiates with the investment bank that the shares will be sold to the syndicate of underwriters at a specified price and then the shares will be sold to the public at a higher price. This agreement is made to sell all the shares where the underwriter guarantees to purchase athe shares and then sold to the public at a higher price wherein he makes his profit.
