Which of the Following Statements Regarding Best Efforts IPOs Is

question 31

Multiple Choice

Which of the following statements regarding best efforts IPOs is FALSE?

• A)For smaller IPOs,the underwriter commonly accepts the deal on this basis.
• B)The underwriter does not guarantee that the stock will be sold,but instead tries to sell the stock for the best possible price.
• C)Often these arrangements have an all-or-none clause: either all of the shares are sold in the IPO,or the deal is called off.
• D)If the entire issue does not sell out,the underwriter is on the hook for the unsold shares.