ShmoopTube
Where Monty Python meets your 10th grade teacher.
Search Thousands of Shmoop Videos
Incorporation Videos 104 videos
What is a Dissident Director? The Board of Directors of a company usually reaches a consensus the majority of the time in order to decide on polici...
"Safe harbor" refers to the notion that, if you follow a basic set of rules, you cannot be found guilty of a crime or shady dealings.
What is Contingent Liability? Contingent liability refers to a possible liability in the future contingent upon some other event being the trigger....
Finance: What is a Firm Deal: Commit, Quote? 7 Views
Share It!
Description:
What is a Firm Deal: Commit, Quote? An underwriter gives a firm commitment when a company decides to have an IPO. When they give a firm commitment, it means they are willing to buy any outstanding shares or securities that are not purchased by the public. A firm quote just means that the bid is non-negotiable, so when someone takes the deal to buy or sell the security, the party on the other side has to do it because they made the firm quote.
- Social Studies / Finance
- Finance / Financial Responsibility
- College and Career / Personal Finance
- Life Skills / Personal Finance
- Finance / Finance Definitions
- Life Skills / Finance Definitions
- Finance / Personal Finance
- Courses / Finance Concepts
- Subjects / Finance and Economics
- Finance and Economics / Terms and Concepts
- Terms and Concepts / Credit
- Terms and Concepts / Incorporation
- Terms and Concepts / Regulations
- Terms and Concepts / Tax
Transcript
- 00:00
Finance allah shmoop What are a firm deal Ah firm
- 00:06
commit and a firm quote No a lot of firms
- 00:11
here is by agra involved in this one No Well
- 00:14
okay people Yes You knew we were going to go
- 00:16
there We'll start with firm commit Well the whole notion
Full Transcript
- 00:19
of a firm commit applies on a few fronts Like
- 00:22
if a lender is lending dough Well usually there is
- 00:25
a contractual agreement cleverly called a firm commitment letter and
- 00:31
it derives a firm deal like the deal will follow
- 00:34
that commitment And that letter specifies the amount of money
- 00:38
the lender is willing to lend at a given interest
- 00:41
rate With all the terms you know spelled out for
- 00:44
given time like this offer is good for thirty days
- 00:47
or until june first Or until the where wolf grows
- 00:51
What they crow Don't they Okay howl whatever In an
- 00:53
ai po when a bank is selling shares on behalf
- 00:56
of a company issuing them a firm commit gives rise
- 01:00
to a firm deal And it basically says that the
- 01:03
bank is responsible for selling any unsold shares That is
- 01:07
It's called a quote bought deal unquote And the bank
- 01:10
Either sells those aipo shares to investors or well they
- 01:13
buy them for their own account In a firm quote
- 01:16
the commitment involved usually refers to a broker dealers bid
- 01:20
ask spread in selling those shares like she holds a
- 01:24
few million shares of amazon in inventory and publishes to
- 01:27
her constituency that she is firm as a buyer at
- 01:32
eleven hundred two and twenty and a seller at eleven
- 01:35
hundred eight and fifty Got it sets one one zero
- 01:39
two point two zero in a cellar at one one
- 01:42
zero eight point five oh yeah that's how it would
- 01:44
look well if anyone matches those numbers then she is
- 01:48
legally obligated to sell them And just in case someone
- 01:51
wants to buy a good gillian shares i am or
- 01:54
than she carries in inventory well there's usually a limit
- 01:58
number attached to her offer for like i stand firm
- 02:01
on one hundred thousand at this price like a hundred
- 02:04
thousand shares and not a hundred thousand won something like
- 02:07
that anyway so firm think obligated confirmed contracted for legally
- 02:13
binding and sometimes yeah that'll give you cramps Just try 00:02:17.1 --> [endTime] prunes
Related Videos
GED Social Studies 1.1 Civics and Government
What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...
What's a dividend? At will, the board of directors can pay a dividend on common stock. Usually, that payout is some percentage less than 100 of ear...
How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in...