Under a best efforts arrangement, the investment bank purchases all of the shares from the issuing firm and then resells the shares to the public. Under this arrangement, the investment banks assume significant risk.

Question

Quizplus · Accepted Answer

In a best efforts arrangement, the investment bank does not purchase the shares but instead acts as an agent to sell as many shares as possible, assuming less risk compared to a firm commitment arrangement.

Under a Best Efforts Arrangement, the Investment Bank Purchases All