A rights offering in which an underwriting syndicate agrees to purchase the unsubscribed portion of an issue is called a(n) ________ underwriting.

Question

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A standby underwriting involves the underwriting syndicate agreeing to purchase any shares not sold to the public during the rights offering. This provides assurance to the issuing company that all of the shares will be sold and the desired capital will be raised.

A Rights Offering in Which an Underwriting Syndicate Agrees to Purchase