A) a rights offering.
B) over allocating.
C) a diversified offer.
D) crowdfunding.
E) a standby offer.
G) B) and C)
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A) $3.10
B) $3.06
C) $2.72
D) $2.83
E) $2.99
G) B) and E)
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A) Dilution of percentage ownership occurs whenever an investor fully participates in a rights offer.
B) Market value dilution increases as the net present value of a project increases.
C) Market value dilution occurs when the net present value of a project is negative.
D) Neither book value dilution nor market value dilution has any direct bearing on individual shareholders.
E) Book value dilution is the cause of market value dilution.
G) C) and E)
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A) − $286
B) − $234
C) − $148
D) $275
E) $329
G) C) and D)
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A) an oversubscription cost.
B) underpricing.
C) dilution.
D) the Green Shoe provision.
E) a locked-in period.
G) B) and D)
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A) Best efforts
B) Shelf
C) Oversubscribed
D) Private placement
E) Firm commitment
G) B) and E)
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A) The quiet period commences when a registration statement is filed with the SEC and ends on the day the IPO shares commence trading.
B) Lockup agreements outline how oversubscribed IPO shares will be allocated.
C) Additional IPO shares can be issued in accordance with the lockup agreement.
D) Quiet period restrictions only apply to the issuer of new securities.
E) A public interview with an issuer's CFO could cause a forced delay in the issuer's IPO.
G) All of the above
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A) $911
B) $1,302
C) $799
D) $1,095
E) $1,057
G) B) and C)
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A) − .13 percent
B) −.21 percent
C) −.18 percent
D) −.03 percent
E) −.26 percent
G) C) and D)
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A) verifies the accuracy of the information contained in the prospectus.
B) publishes red herrings on prospective new security offerings.
C) examines the prospectus during the Green Shoe period.
D) reviews registration statements to ensure they comply with current laws and regulations.
E) determines the final offer price once they have approved the registration statement.
G) A) and D)
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A) Venture capitalists always assume management responsibility for the companies they finance.
B) Exit strategy is a key consideration when selecting a venture capitalist.
C) Venture capitalists limit their services to providing money to start-up firms.
D) Most venture capitalists are long-term investors in the companies they finance.
E) A venture capitalist normally invests in a new idea from conception through the IPO.
G) B) and E)
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A) venture capitalist.
B) group of attorneys providing services for an IPO.
C) block of investors who control a firm.
D) bank that loans funds to finance the start-up of a new company.
E) group of underwriters sharing the risk of selling a new issue of securities.
G) A) and E)
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A) Overallotment
B) Percentage ownership dilution
C) Green Shoe allocation
D) Red herring allotment
E) Abnormal event
G) A) and E)
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A) Helps prevent the "winner's curse"
B) Rewards institutional investors who share their market value opinions
C) Reduces potential lawsuits against underwriters
D) Diminishes underwriting risk
E) Provides better returns to issuing firms
G) A) and D)
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A) $.97
B) $.87
C) $.76
D) $.52
E) $1.04
G) A) and B)
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A) $1.05
B) $.80
C) $1.00
D) $1.50
E) $4.00
G) C) and D)
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A) $200 thousand.
B) $500 thousand.
C) $1 million.
D) $5 million.
E) $50 million.
G) C) and D)
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A) Domestic bonds are generally more expensive to issue than equity IPOs.
B) The gross spread as a percentage of proceeds is the same for similar-sized IPOs and SEOs.
C) A seasoned offering is always more expensive on a percentage basis than an IPO.
D) There tends to be substantial economies of scale when issuing any type of security.
E) The costs of issuing convertible bonds tend to be less on a percentage basis than the costs of issuing straight debt.
G) B) and C)
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A) 559,474
B) 604,011
C) 566,667
D) 571,008
E) 538,409
G) C) and E)
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A) Venture capitalists desire shares of common stock but avoid preferred stock.
B) Venture capital is relatively easy to obtain.
C) Venture capitalists rarely assume active roles in the management of the financed firm.
D) Venture capitalists should have key contacts and financial strength.
E) Venture capital is relatively inexpensive in today's competitive markets.
G) B) and E)
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