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There are two basic types of underwriting involved in a cash offer; firm commitment and best offer. Please differentiate between firm commitment and best offer.

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Firm commitment and best offer is discussed in the solution.

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The basic difference between firm commitment and best offer in underwriting is that in case of firm commitment, the underwriter promises to purchase the securities for their own account, if they are not able to sell such shares to the public or in other words, are not able to secure full subscription of the shares. The ...

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Sheetal Jain, PGDM
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  • BComm, University of Delhi
  • Post Graduate Diploma in Management (Equivalent to MBA), All India Management Association
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