All of the following statements about stand-by underwriting are true EXCEPT:
A) The investment banker guarantees the issuer a fixed amount of money from the share sale.
B) The investment banker actually buys the shares from the company.
C) The issuer bears the risk that the resale price might be lower than the price the underwriter pays.
D) The underwriter bears the risk that the resale price might be lower than the price the underwriter pays.
Correct Answer:
Verified
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