Arguments to explain why most equity issues are underwritten versus sold through

Question

Arguments to explain why most equity issues are underwritten versus sold through a rights offering are:

underwriters buy at an agreed upon price and bear some risk of selling the issue.

cash proceeds are available sooner in underwriting and the issue is available to a wider market.

investment bankers can provide market advice and certify the issue for potential investors.

All of these.

None of these.

underwriters buy at an agreed upon price and bear some risk of selling the issue.

cash proceeds are available sooner in underwriting and the issue is available to a wider market.

investment bankers can provide market advice and certify the issue for potential investors.

All of these.

None of these.

Explanation / Answer

Arguments to explain why most equity issues are underwritten versus sold through a rights offering are:

underwriters buy at an agreed upon price and bear some risk of selling the issue.

cash proceeds are available sooner in underwriting and the issue is available to a wider market.

investment bankers can provide market advice and certify the issue for potential investors.

ALL of these.

An underwriter is an intermediary in the financial markets. They offer financial advisory services to company, underwrite the issue and ensure it is subscribed if not, they either sell the securities at a lesser price or retain them.

underwriters buy at an agreed upon price and bear some risk of selling the issue.

cash proceeds are available sooner in underwriting and the issue is available to a wider market.

investment bankers can provide market advice and certify the issue for potential investors.

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