Question

Ecclestone Corporation plans to go for an initial public offering and, therefore, seeks the help of an investment bank in issuing the new securities. The bank agrees to help the company in finding potential buyers and providing advice on the pricing of the securities. However, the bank does not guarantee that it will accomplish the task of selling all of the company's securities at a high price. In this scenario, the investment bank is using a _____ approach.
A. partial risk factor
B. best efforts
C. firm commitment
D. value investing

Answer 1

Answer:

The answer  is: B) best efforts approach

Explanation:

To understand the best efforts approach we should about our PE coach that always insisted that the important thing was to give our best and off course it was better if we won, but if we didn't at least we tried real hard.

In this case the best efforts includes a legal contract between Ecclestone and their investment bank by which the bank agrees to do their best effort in selling the stocks at the highest possible price.