Question

If an investment firm underwrites a stock issue, thea.corporation obtains cash immediately from the investment firm.b.investment firm has guaranteed profits on the sale of the stock.c.risk of being unable to sell the shares stays with the issuing corporation.d.issuance of stock is likely to be directly to creditors.

Answer 1

The correct answer is letter "A": corporation obtains cash immediately from the investment firm.

Step-by-step explanation:

The Initial Public Offering (IPO) is a process by which companies look for growing capital through financial investment institutions that issue equities, usually stocks that will be traded into the open market. Those firms must meet certain criteria imposed by the Securities and Exchange Commission (SEC) otherwise the firm will be considered over the counter (OTC).