If the offer price is set too high, the issuing firm will lose under a best-effort agreement.

Question

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If the offer price is set too high, investors may not be willing to pay for the securities, resulting in a lack of demand and potential under-subscription. Under a best-effort agreement, the issuing firm is responsible for selling as many securities as possible, and if they are unable to sell the allotted amount at the set price, they may lose out on potential funding.

If the Offer Price Is Set Too High, the Issuing