A Health and Fitness Startup Company Goes for an Initial

Multiple Choice

A health and fitness startup company goes for an initial public offering. For assistance, it enters into a firm commitment arrangement with an investment bank. As per the agreement, the investment bank itself will purchase all the shares at a specified price. This will guarantee that the company will receive a fixed amount of new funds. This scenario exemplifies a(n) _____.

A) underwriting
B) proxy selling
C) follow-on offering
D) corporate spin-off