According to best efforts offering, the investment bank in return of providing services must ________________?
Correct answer: B. receive fee
- A. not receive fee
- B. receive fee
- C. receive interest rate
- D. receive market rate of return
Explanation
Under a best-efforts offering, the investment bank acts as an agent and attempts to sell the securities without guaranteeing the entire issue. It is compensated for these services by receiving a fee or commission.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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