1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Mars2501 [29]
3 years ago
6

In this firm commitment offering who bears the financial risk? Who would bear the risk in a best efforts offering?

Business
1 answer:
shepuryov [24]3 years ago
6 0

An investment banker agrees to underwrite an issue of 10 million shares of stock for TWResearch, Inc. on a firm commitment basis. The investment banker pays $10.50 per share to TWResearch, Inc. for the 10 million shares of stock. It then sells those shares to the public for $11.20 per share.

Answer:

In a firm commitment offering, the investment banker bears the financial risk and buys the securities from TWResearch to sell to the public at its own terms.

In a best efforts offering, TWResearch, Inc. bears the financial risk and only makes its best efforts to sell the securities without buying them from TWResearch.

Explanation:

With a firm commitment offering, the investment banker enters into an agreement to purchase all the securities from TWResearch at an agreed price, and then, commits itself to selling the securities to the public at its own chosen price.  As it pockets the ensuing gain or loss, the investment banker bears all the financial risk.  With a best efforts offering, the investment banker does not assume inventory risk, but makes its best efforts in selling the securities. TWResearch bears the residual financial risk since the underwriter forwards to TWResearch all  the proceeds from the issue, after deducting its commission.

You might be interested in
which is true:_______A. high p/e ratio could mean that the company has a great deal of uncertainty in its future earningsB. low
kondor19780726 [428]

Answer:

1. Which Statement is true:

B. low p/e ratio could mean that the company has a great deal of uncertainty in its future earnings.

2. Qualitative analysis:

According to your understanding, a company with less competition is considered to be (more or less) risky than companies with a wide multiple competitors.

Explanation:

Company A's Price/Earnings (P/E) ratio is calculated as the market price of its shares divided by the earnings per share.  It shows the value investors have over a stock.  With a high P/E ratio, the company's stock could be over-valued, or investors are expecting high growth rates in the future.  This is unlike a low P/E ratio that shows that the stock is undervalued or that investors are not expecting high growth rates in the future because of uncertainty.

Without competition, Company A is riskier  than Company B which operates efficiently and competitively.  There is that competitive edge that competitive companies possess.  Monopolies do not enjoy that advantage.  It is, therefore, riskier to have no competition.

5 0
3 years ago
Define nongovernment organizations
arlik [135]

Answer:

-UNICEF Việt Nam – Quỹ Nhi đồng Liên Hiệp Quốc

– UNFPA – Quỹ Dân số Liên Hợp Quốc

– UNIDO – Tổ chức Phát triển Công nghiệp Liên Hiệp Quốc

– Aide et Action International

– IntraHealth International

– The Asia Foundation

Explanation:

Tổ chức phi chính phủ phủ là tổ chức quốc tế trong đó các thành viên tham gia không phải là chính phủ, tổ chức phi chính phủ được thành lập một cách tự nguyện, hợp pháp không vì lợi nhuận, thúc đẩy sự phát triển trong công nghệ, khoa học kỹ thuật…

7 0
3 years ago
When preparing her monthly budget, marge kent has a total spending allowance of $4,600. each month she pays $1,200 in rent, $60
Naya [18.7K]
<span>The rent, cable bill, and auto loan are fixed expenses that add up to $1500. $1500 divided by the $4600 total that she has is .326 so Margie spends about 33% of her budget on these fixed expenses. That is about one third of her total budget going to fixed expenses.</span>
8 0
3 years ago
Last season at City Opera House, far more people attended opera X than opera Y. However, opera Y generated far greater net profi
ryzh [129]

Answer:

c. a difference in the subject matters of operas X and Y

Explanation:

All factors could directly explain the fact that opera Y generated far greater net profits that did opera X except for this one. Although the subject matter might have some impact on sales, it could not do so in a direct way. It could only do so if we take other factors into account, such as the cost of producing a particular opera or the interest that people have on an opera (which results in greater or lesser ticket sales).

6 0
3 years ago
How is your hat a representation of your leadership skills? (Take your time)
levacccp [35]

Answer:Not the kind that people might laugh at or that might smoosh your hair, ... Change Agent. ... The best leaders put on their delegator hat willingly and strategically to ... With the right environment, resources, skills and knowledge,

Explanation:

8 0
3 years ago
Other questions:
  • At the polling place you will need to show three forms of identification. True or False?
    12·1 answer
  • What determines the color or a translucent object
    7·2 answers
  • DeLong Corporation was organized on January 1, 2017. It is authorized to issue 10,000 shares of 8%, $100 par value preferred sto
    9·1 answer
  • What way of calculating ROI makes it easiest to compare investments?
    15·2 answers
  • In response to digital marketing strategies, consumers are changing their information searches and _______ to fit with the emerg
    7·1 answer
  • Costs that are NOT affected by the quantity of a product sold are _______ costs. Examples of these costs include rent, insurance
    5·1 answer
  • An advertising executive takes over a Google Search ads campaign. On his Google Ads Recommendations page he notes that the campa
    13·1 answer
  • The word local describes:
    13·1 answer
  • Wolf Computer exchanged a machine with a book value of $40,000 and a fair value of $45,000 for a very similar machine. In additi
    6·1 answer
  • In a statement of approximately 75 words explain why the economic systems in countries with dictatorships or closed systems of g
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!