Which statement is correct?

Question

Quizplus · Accepted Answer

Underwriters may receive warrants as part of their compensation. The Green Shoe option (A) is exercised to purchase additional shares from the issuer when demand is high, not when the market price declines. In a best efforts underwriting (B), the underwriters do not guarantee the number of shares sold, whereas in a firm commitment underwriting they do. Competitive underwriting (C) is generally less expensive than negotiated underwriting because multiple underwriters compete for the offering, driving down fees. While both competitive and negotiated underwritings are commonly used, it is not true that the majority of equity underwritings in the U.S. are competitive underwritings (D).

Which Statement Is Correct