The following types of underwriting contracts are the most common:
In the firm commitment contract, the underwriter guarantees the sale of the issued stock at the agreed-upon price. For the issuer, it is the safest but the most expensive type of the contracts, since the underwriter takes the risk of sale.[2]
In the best efforts contract, the underwriter agrees to sell as many shares as possible at the agreed-upon price.[2]
Under the all-or-none contract, the underwriter agrees either to sell the entire offering or to cancel the deal.[2]
Stand-by underwriting,[3] also known as strict underwriting or old-fashioned underwriting is a form of stock insurance: the issuer contracts the underwriter for the latter to purchase the shares the issuer failed to sell under stockholders' subscription and applications.[4]
Referencesedit
^"Underwriting". Corporate Finance Institute. Retrieved 2022-11-16.
^ abcd"The Investment Banking Handbook" by J. Peter Williamson, 1988, ISBN0-471-81562-4 , ""Underwriting Contracts", p. 128
^"What is Underwriting?". Robinhood. Retrieved 2022-11-16.
^"The Law of Securities Regulation" by Thomas Lee Hazen, 1996, ISBN0-314-08587-4, p. 405.
January 01, 1970
underwriting, contract, investment, banking, underwriting, contract, contract, between, underwriter, issuer, securities, following, types, underwriting, contracts, most, common, firm, commitment, contract, underwriter, guarantees, sale, issued, stock, agreed, . In investment banking 1 an underwriting contract 2 is a contract between an underwriter and an issuer of securities The following types of underwriting contracts are the most common In the firm commitment contract the underwriter guarantees the sale of the issued stock at the agreed upon price For the issuer it is the safest but the most expensive type of the contracts since the underwriter takes the risk of sale 2 In the best efforts contract the underwriter agrees to sell as many shares as possible at the agreed upon price 2 Under the all or none contract the underwriter agrees either to sell the entire offering or to cancel the deal 2 Stand by underwriting 3 also known as strict underwriting or old fashioned underwriting is a form of stock insurance the issuer contracts the underwriter for the latter to purchase the shares the issuer failed to sell under stockholders subscription and applications 4 References edit Underwriting Corporate Finance Institute Retrieved 2022 11 16 a b c d The Investment Banking Handbook by J Peter Williamson 1988 ISBN 0 471 81562 4 Underwriting Contracts p 128 What is Underwriting Robinhood Retrieved 2022 11 16 The Law of Securities Regulation by Thomas Lee Hazen 1996 ISBN 0 314 08587 4 p 405 Retrieved from https en wikipedia org w index php title Underwriting contract amp oldid 1146548749, wikipedia, wiki, book, books, library,
