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Finance: What is a Firm Deal: Commit, Quote? 7 Views
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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
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