Spandra Electronics wants to raise money by selling stock.After talking to several investment banking firms,Spandra decides to hire Goldman Sachs to sell 5 million shares of its common stock.Goldman sells 4.5 million shares and returns the rest to Spandra.This is an example of

Question

Quizplus · Accepted Answer

This situation aligns with a commission or best-efforts agreement because Goldman Sachs did not guarantee to sell all of the shares, but rather sold as many as they could and returned the unsold portion to Spandra. A privileged subscription with a standby agreement typically involves the investment bank agreeing to purchase any unsold shares, while a competitive bid purchase involves multiple buyers competing to purchase the shares.

Spandra Electronics Wants to Raise Money by Selling Stock