Underwriting contract (original) (raw)
In investment banking, an underwriting contract 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. * In the best efforts contract, the underwriter agrees to sell as many shares as possible at the agreed-upon price. * Under the all-or-none contract, the underwriter agrees either to sell the entire offering or to cancel the deal.
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| dbo:abstract | In investment banking, an underwriting contract 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. * In the best efforts contract, the underwriter agrees to sell as many shares as possible at the agreed-upon price. * Under the all-or-none contract, the underwriter agrees either to sell the entire offering or to cancel the deal. Stand-by underwriting, 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. (en) |
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| dbo:wikiPageWikiLink | dbc:Initial_public_offering dbr:Underwriter dbc:Underwriting dbr:Insurance dbc:Contract_law dbr:Issuer dbr:Investment_banking dbr:Security_(finance) dbr:All-or-none dbr:Stockholder |
| dbp:wikiPageUsesTemplate | dbt:Reflist dbt:Corporate_finance_and_investment_banking |
| dcterms:subject | dbc:Initial_public_offering dbc:Underwriting dbc:Contract_law |
| gold:hypernym | dbr:Contract |
| rdf:type | dbo:Company |
| rdfs:comment | In investment banking, an underwriting contract 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. * In the best efforts contract, the underwriter agrees to sell as many shares as possible at the agreed-upon price. * Under the all-or-none contract, the underwriter agrees either to sell the entire offering or to cancel the deal. (en) |
| rdfs:label | Underwriting contract (en) |
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| is foaf:primaryTopic of | wikipedia-en:Underwriting_contract |