An underwriting arrangement in which the underwriter buys the firm's unsubscribed shares is known as:
A) Firm commitment underwriting.
B) Preemptive rights offering.
C) Standby underwriting arrangement.
D) Bought deal.
E) None of the above.

Question

Quizplus · Accepted Answer

In a standby underwriting arrangement, the underwriter agrees to purchase any unsubscribed shares in a rights offering, ensuring that the issuer raises the intended amount of capital.

An Underwriting Arrangement in Which the Underwriter Buys the Firm's