The Western Power Company, a regional electric utility, sells 500,000 shares of common stock to investors at large. This is most likely to be a "best efforts" offering.

Question

Quizplus · Accepted Answer

This scenario is more indicative of a firm commitment offering, where the underwriter buys all the shares from the issuer and sells them to the public, rather than a best efforts offering where the underwriter sells as many shares as possible without buying them first.

The Western Power Company, a Regional Electric Utility, Sells 500,000