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Commerce and BusinessbackBusinessbackCorporate Finance/Financial ManagementbackFundamentals of Corporate FinancebackPractice Set 2491back

Raising Capital

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Question 1
Free
Multiple Choice

Jones & Co.is funded by a group of individual investors for the sole purpose of providing funding for individuals who are trying to convert their new ideas into viable products.What is this type of funding called?

Choose correct answer/s
A

green shoe funding

B

tombstone underwriting

C

venture capital

D

red herring funding

E

life cycle capital

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Question 2
Free
Multiple Choice

What is the form called that is filed with the SEC and discloses the material information on a securities issuer when that issuer offers new securities to the general public?

Choose correct answer/s
A

prospectus

B

red herring

C

indenture

D

public disclosure statement

E

registration statement

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Question 3
Free
Multiple Choice

Miller & Chase is offering $4 million of new securities to the general public.Which SEC regulation governs this offering?

Choose correct answer/s
A

Regulation A

B

Regulation C

C

Regulation G

D

Regulation Q

E

Regulation R

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Question 4
Free
Multiple Choice

What is a prospectus?

Choose correct answer/s
A

a letter issued by the SEC authorizing a new issue of securities

B

a report stating that the SEC recommends a new security to investors

C

a letter issued by the SEC that outlines the changes required for a registration statement to be approved

D

a document that describes the details of a proposed security offering along with relevant information about the issuer

E

an advertisement in a financial newspaper that describes a security offering

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Question 5
Free
Multiple Choice

Which one of the following is a preliminary prospectus?

Choose correct answer/s
A

tombstone

B

green shoe

C

registration statement

D

rights offer

E

red herring

Check answer
Question 6
Multiple Choice

Advertisements in a financial newspaper announcing a public offering of securities,along with a list of the investment banks handling the offering,are called:

Choose correct answer/s
A
red herrings.
B
tombstones.
C
Green Shoes.
D
registration statements.
E
cash offers.
To unlock the question
Question 7
Multiple Choice

What is an issue of securities that is offered for sale to the general public on a direct cash basis called?

Choose correct answer/s
A
best efforts underwriting
B
firm commitment underwriting
C
general cash offer
D
rights offer
E
herring offer
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Question 8
Multiple Choice

Tony currently owns 12,000 shares of GL Tools.He has just been notified that the firm is issuing additional shares of stock and that he is being given a chance to purchase some of these shares prior to the shares being offered to the general public.What is this type of an offer called?

Choose correct answer/s
A
best efforts offer
B
firm commitment offer
C
general cash offer
D
rights offer
E
priority offer
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Question 9
Multiple Choice

Soup Galore is a partnership that was formed three years ago for the purpose of creating,producing,and distributing healthy soups in a dried form.The firm has been extremely successful thus far and has decided to incorporate and offer shares of stock to the general public.What is this type of an equity offering called?

Choose correct answer/s
A
venture capital offering
B
shelf offering
C
private placement
D
seasoned equity offering
E
initial public offering
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Question 10
Multiple Choice

What is a seasoned equity offering?

Choose correct answer/s
A
an offering of shares by shareholders for repurchase by the issuer
B
shares of stock that have been recommended for purchase by the SEC
C
equity securities held by a firm's founder that are being offered for sale to the general public
D
sale of newly issued equity shares by a firm that is currently publicly owned
E
a set number of equity shares that are issued and offered to the public annually
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Question 11
Multiple Choice

Executive Tours has decided to take its firm public and has hired an investment firm to handle this offering.The investment firm is serving as a(n):

Choose correct answer/s
A
aftermarket specialist.
B
venture capitalist.
C
underwriter.
D
seasoned writer.
E
primary investor.
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Question 12
Multiple Choice

What is the definition of a syndicate?

Choose correct answer/s
A
a venture capitalist
B
a group of attorneys providing services for an IPO
C
block of investors who control a firm
D
a bank that loans funds to finance the start-up of a new firm
E
a group of underwriters sharing the risk of selling a new issue of securities
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Question 13
Multiple Choice

The difference between the underwriters' cost of buying shares in a firm commitment and the offering price of those securities to the public is called the:

Choose correct answer/s
A
gross spread.
B
under price amount
C
filing fee.
D
new issue premium.
E
offer price.
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Question 14
Multiple Choice

D.L.Jones & Co.recently went public.The firm received $20.80 a share on the entire offer of 25,000 shares.Keeser & Co.served as the underwriter and sold 23,700 shares to the public at an offer price of $22 a share.What type of underwriting was this?

Choose correct answer/s
A
best efforts
B
shelf
C
over subscribed
D
private placement
E
firm commitment
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Question 15
Multiple Choice

Blue Stone Builders recently offered to sell 45,000 newly issued shares of stock to the public.The underwriters charged a fee of 8 percent and paid Blue Stone Builders $16.40 a share on 40,000 shares.Which one of the following terms best describes this underwriting?

Choose correct answer/s
A
best efforts
B
shelf
C
direct rights
D
private placement
E
firm commitment
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Question 16
Multiple Choice

The 40-day period following an IPO during which the SEC places restrictions on the public communications of the issuer is known as the _____ period.

Choose correct answer/s
A
silent
B
quiet
C
lockup
D
green
E
red
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Question 17
Multiple Choice

Denver Liquid Wholesalers recently offered 50,000 new shares of stock for sale.The underwriters sold a total of 53,000 shares to the public.The additional 3,000 shares were purchased in accordance with which one of the following?

Choose correct answer/s
A
Green shoe provision
B
Red herring provision
C
quiet provision
D
lockup agreement
E
post-issue agreement
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Question 18
Multiple Choice

Shares of PLS United have been selling with rights attached.Tomorrow,the stock will sell independent of these rights.Which one of the following terms applies to tomorrow in relation to this stock?

Choose correct answer/s
A
pre-issue date
B
aftermarket date
C
declaration date
D
holder-of-record date
E
ex-rights date
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Question 19
Multiple Choice

The date on which a shareholder is officially listed as the recipient of stock rights is called the:

Choose correct answer/s
A
issue date.
B
offer date.
C
declaration date.
D
holder-of-record date.
E
ex-rights date.
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Question 20
Multiple Choice

A rights offering in which an underwriting syndicate agrees to purchase the unsubscribed portion of an issue is called a _____ underwriting.

Choose correct answer/s
A
standby
B
best efforts
C
firm commitment
D
direct fee
E
tombstone
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