Peak Performance Sporting Goods,Inc. ,needs a large amount of funds to expand its operation and open new stores.Jackson is one of a team of finance professionals that is working on Peak Performance's initial public offering.Peak Performance will partner with an investment banker to assist in pricing and selling several million original issue shares of company stock.Jackson just received word that the investment bank is willing to _____________ the issue.This means the investment bank will purchase the entire issue at a discount,and sell it for full price to interested investors.

Question

Quizplus · Accepted Answer

The term "underwrite" is commonly used in the context of initial public offerings (IPOs) to refer to the process by which an investment bank or group of banks agrees to buy all of the shares in a company's offering at a discounted price, and then sells those shares to the public for a higher price. This process is sometimes referred to as "underwriting" the issue, and it helps to ensure that the company is able to raise the funds it needs to expand its operations.