Dominic Works for an Investment Bank That Helps Start­ups Go

Dominic works for an investment bank that helps start­ups go public. The client firm he is currently helping shows great potential because of the fact that the firm owns several patents on marketable innovations. Dominic's investment bank has agreed to underwrite the stock issue. It means the investment bank will:

A) set the stock price relatively high at the beginning of the initial public offering (IPO) and gradually lower it until all shares are sold.
B) guarantee the sale of all shares to investors in a stated time period (usually 72 hours) , but in order to do so, will set the price relatively low at the beginning of the initial public offering (IPO) .
C) purchase all the shares of stock itself at an agreed­upon price so that the client will receive a known amount of funds.
D) arrange for a single major venture capital firm to buy all of the stock at an agreed­ upon price.