MENU
In a firm commitment offering, any shares that are not sold are:
Suggested Answer: A
Get Premium Series-7 Questions
as Interactive Web-Based Practice Test or PDF
Real Exam Format
Detailed Explanations
Instant Access
Get Your Practice Test
$0.45. Since treasury stock does not receive dividends, divide $450,000 by the outstanding 100,000 shares to arrive at $0.45 per share.
35 comments · newest first
IV
Ivette
11 months ago
Yup, any unsold shares go back to the issuer!
TR
Tracey
11 months ago
I thought they went to treasury stock instead.
BE
Bernardine
12 months ago
Wait, are you sure about that?
LO
Lorrine
12 months ago
Totally agree, that's how it works!
EL
Elke
1 year ago
They get returned to the issuing corporation.
LE
Leonor
1 year ago
I feel like the correct answer is that they are returned to the issuing corporation, but I need to double-check my notes.
FR
Fredric
1 year ago
I’m a bit confused; I thought unsold shares might be owned by the syndicate, but that doesn’t sound right now.
KI
Kimberlie
1 year ago
I remember a practice question about this, and I think the answer was that they get transferred to treasury stock.
MA
Margot
1 year ago
I think in a firm commitment offering, unsold shares are usually returned to the issuing corporation, but I'm not completely sure.
LA
Lacey
1 year ago
I'm leaning towards C - the unsold shares get transferred to treasury stock. That makes sense to me since the underwriter is taking on the risk of the offering, so they wouldn't want to be stuck holding the leftover shares. Transferring them to treasury seems like the cleanest solution.
NA
Nakisha
1 year ago
Okay, let me walk through this step-by-step. In a firm commitment offering, the underwriter agrees to purchase all the shares from the issuer, regardless of whether they can sell them all to investors. So the unsold shares would have to go somewhere - they can't just disappear. I think the most logical answer is that they get transferred back to the issuing corporation.
BR
Brock
1 year ago
Hmm, I'm a little unsure about this one. I know firm commitment offerings are different from best efforts offerings, but I can't quite remember the specifics. I'll have to think this through carefully.
LO
Loren
1 year ago
I'm pretty sure the answer is A - the unsold shares are returned to the issuing corporation. That's the standard procedure in a firm commitment offering.
AL
Alfred
1 year ago
If the shares don't sell, maybe the company can just give them away as party favors at the next corporate retreat. That's a great use of treasury stock, right?
YO
Yolando
1 year ago
I'm going to go with C. The unsold shares get transferred to treasury stock. It's the only answer that really makes sense to me.
EM
Emogene
1 year ago
Hmm, I'm not too sure about this one. Maybe B? Listing the unsold shares in the over-the-counter market could be an option. Though I'm probably just guessing here.
JA
Jacqueline
1 year ago
Yes, the correct answer is C) transferred to treasury stock.
MI
Ming
1 year ago
That makes sense, I'll go with C) transferred to treasury stock too.
MA
Mabelle
1 year ago
I agree, the unsold shares are usually transferred to treasury stock.
PA
Paz
1 year ago
Yes, that's correct. The unsold shares are typically returned to the issuing corporation in a firm commitment offering.
CO
Coral
1 year ago
I think it's actually C) transferred to treasury stock.
VA
Val
1 year ago
I agree, unsold shares are usually returned to the issuing corporation.
DO
Dorcas
1 year ago
I think it's actually A) returned to the issuing corporation.
EA
Earleen
1 year ago
This is a tricky one, but I'm going with A. The unsold shares get returned to the issuing corporation. Seems like the logical thing to do.
ER
Ernie
2 years ago
D sounds good to me. The members of the syndicate should own the shares that didn't sell. They're the ones who took on the risk, after all.
TR
Trina
1 year ago
I'm not sure, but I think B might be the right choice. Unsold shares could be listed in the over-the-counter market.
QU
Quentin
1 year ago
I think C is the correct answer. The unsold shares are usually transferred to treasury stock.
AF
Afton
1 year ago
I agree, D makes sense. The syndicate members should have ownership of the unsold shares.
IO
Iola
2 years ago
I think the correct answer is C. The unsold shares are transferred to treasury stock. That's how it works in a firm commitment offering, right?
EU
Eugene
1 year ago
That's right! The unsold shares in a firm commitment offering are transferred to treasury stock. Good job on knowing that!
AN
Andree
1 year ago
I believe the correct answer is C as well. The unsold shares are not returned to the issuing corporation or listed in the over-the-counter market.
RA
Raymon
2 years ago
Yes, you are correct! The unsold shares are indeed transferred to treasury stock in a firm commitment offering.
EL
Elvera
2 years ago
I'm not sure about this one, but it makes sense that unsold shares would be returned to the issuing corporation. So, I'll go with A) as well.
TH
Thurman
2 years ago
I agree with Ronald, because in a firm commitment offering, the underwriter agrees to buy all the shares, so any unsold shares would go back to the issuing corporation.
RO
Ronald
2 years ago
I think the answer is A) returned to the issuing corporation.