In undertaking a seasoned equity offering (SEO), why do firms almost a

In undertaking a seasoned equity offering (SEO), why do firms almost always hire an underwriter via negotiation rather than competitive bidding?

a. The SEC mandates negotiation for SEOs (except in rare cases).
b. The selling process can be problematic because of informational asymmetry problems.
c. Negotiation actually results in a lower underwriter spread.

ANSWER

B