Assume that a stock-issuing firm has a choice between a private placement selling the shares for $47.50 per share or a best efforts offering that will sell all available shares at the prices described in the following probability distribution:

Best Efforts expected probability distribution

	Probability	selling price
lowest quoted price	30%	$44.00
mid-range price	45%	$46.00
highest quoted price	25%	$49.00

1) Assuming that the issue is fully suscribed, or sold, which method would generate the most capital for the issuing firm? a) private placement b) best efforts sale