Stox & Sellers is a relatively new corporation that has been working with an investment bank to carry out an initial public offering for its stock. The investment bank has agreed to a best efforts approach to selling the shares. This is good news for Stox & Sellers, because it means that the investment bank itself will purchase all of the shares at a specified price, thus guaranteeing that the firm receives a known amount of new funds.

Question

Quizplus · Accepted Answer

A best efforts approach does not guarantee that all shares will be sold at a specified price. The investment bank will only make its best effort to sell the shares, but there is no guarantee of a specific price or quantity sold.

Stox & Sellers Is a Relatively New Corporation That Has