Which of the Following Statements Regarding Best Efforts IPOs Is

question 27

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.

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Definitions:

Corporate Campaign

An organized effort, typically by unions, targeting a company to apply pressure for changes in labor practices or to support workers' rights.

Permanent Replace

The practice of hiring new employees to permanently take the positions of striking workers.

Federal Racketeering Laws

Laws under the Racketeer Influenced and Corrupt Organizations Act (RICO) designed to combat organized crime by allowing extended penalties for acts performed as part of a criminal organization.

Corporate Campaigns

Organized efforts, typically by unions or activist groups, aimed at applying pressure on a corporation to change its practices or to achieve specific goals.