With best efforts compensation,the investment banker essentially buys the entire stock issue from the company at one price and then sells the issue at auction for a higher price.

Question

Quizplus · Accepted Answer

With best efforts compensation, the investment banker only uses their best efforts to sell the stock issue at a higher price through an auction process but does not guarantee the sale or purchase of the entire issue. The investors themselves bear the risk of unsold shares.

With Best Efforts Compensation,the Investment Banker Essentially Buys the Entire