corporation-finance-test-bank-chapter-15

Chapter15-RaisingCapital15-1Chapter15RaisingCapitalAnswerKeyMultipleChoiceQuestions1.Jones&Co.isfundedbyagroupofindividualinvestorsforthesolepurposeofprovidingfundingforindividualswhoaretryingtoconverttheirnewideasintoviableproducts.Whatisthistypeoffundingcalled?A.greenshoefundingB.tombstoneunderwritingC.venturecapitalD.redherringfundingE.lifecyclecapitalRefertosection15.1AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-1Section:15.1Topic:Venturecapital2.WhatistheformcalledthatisfiledwiththeSECanddisclosesthematerialinformationonasecuritiesissuerwhenthatissueroffersnewsecuritiestothegeneralpublic?A.prospectusB.redherringC.indentureD.publicdisclosurestatementE.registrationstatementRefertosection15.2AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-2Section:15.2Topic:RegistrationstatementChapter15-RaisingCapital15-23.Miller&Chaseisoffering$4millionofnewsecuritiestothegeneralpublic.WhichSECregulationgovernsthisoffering?A.RegulationAB.RegulationCC.RegulationGD.RegulationQE.RegulationRRefertosection15.2AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-2Section:15.2Topic:RegulationA4.Whatisaprospectus?A.aletterissuedbytheSECauthorizinganewissueofsecuritiesB.areportstatingthattheSECrecommendsanewsecuritytoinvestorsC.aletterissuedbytheSECthatoutlinesthechangesrequiredforaregistrationstatementtobeapprovedD.adocumentthatdescribesthedetailsofaproposedsecurityofferingalongwithrelevantinformationabouttheissuerE.anadvertisementinafinancialnewspaperthatdescribesasecurityofferingRefertosection15.2AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-2Section:15.2Topic:ProspectusChapter15-RaisingCapital15-35.Whichoneofthefollowingisapreliminaryprospectus?A.tombstoneB.greenshoeC.registrationstatementD.rightsofferE.redherringRefertosection15.2AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-2Section:15.2Topic:Redherring6.Advertisementsinafinancialnewspaperannouncingapublicofferingofsecurities,alongwithalistoftheinvestmentbankshandlingtheoffering,arecalled:A.redherrings.B.tombstones.C.GreenShoes.D.registrationstatements.E.cashoffers.Refertosection15.2AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-2Section:15.2Topic:TombstonesChapter15-RaisingCapital15-47.Whatisanissueofsecuritiesthatisofferedforsaletothegeneralpubliconadirectcashbasiscalled?A.besteffortsunderwritingB.firmcommitmentunderwritingC.generalcashofferD.rightsofferE.herringofferRefertosection15.3AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-2Section:15.3Topic:Generalcashoffer8.Tonycurrentlyowns12,000sharesofGLTools.Hehasjustbeennotifiedthatthefirmisissuingadditionalsharesofstockandthatheisbeinggivenachancetopurchasesomeofthesesharespriortothesharesbeingofferedtothegeneralpublic.Whatisthistypeofanoffercalled?A.besteffortsofferB.firmcommitmentofferC.generalcashofferD.rightsofferE.priorityofferRefertosection15.3AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-2Section:15.3Topic:RightsofferChapter15-RaisingCapital15-59.SoupGaloreisapartnershipthatwasformedthreeyearsagoforthepurposeofcreating,producing,anddistributinghealthysoupsinadriedform.Thefirmhasbeenextremelysuccessfulthusfarandhasdecidedtoincorporateandoffersharesofstocktothegeneralpublic.Whatisthistypeofanequityofferingcalled?A.venturecapitalofferingB.shelfofferingC.privateplacementD.seasonedequityofferingE.initialpublicofferingRefertosection15.3AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-3Section:15.3Topic:Initialpublicoffering10.Whatisaseasonedequityoffering?A.anofferingofsharesbyshareholdersforrepurchasebytheissuerB.sharesofstockthathavebeenrecommendedforpurchasebytheSECC.equitysecuritiesheldbyafirm'sfounderthatarebeingofferedforsaletothegeneralpublicD.saleofnewlyissuedequitysharesbyafirmthatiscurrentlypubliclyownedE.asetnumberofequitysharesthatareissuedandofferedtothepublicannuallyRefertosection15.3AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-2Section:15.3Topic:SeasonedequityofferingChapter15-RaisingCapital15-611.ExecutiveTourshasdecidedtotakeitsfirmpublicandhashiredaninvestmentfirmtohandlethisoffering.Theinvestmentfirmisservingasa(n):A.aftermarketspecialist.B.venturecapitalist.C.underwriter.D.seasonedwriter.E.primaryinvestor.Refertosection15.4AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-2Section:15.4Topic:Underwriters12.Whatisthedefinitionofasyndicate?A.aventurecapitalistB.agroupofattorneysprovidingservicesforanIPOC.blockofinvestorswhocontrolafirmD.abankthatloansfundstofinancethestart-upofanewfirmE.agroupofunderwriterssharingtheriskofsellinganewissueofsecuritiesRefertosection15.4AACSB:N/ABloom's:KnowledgeDifficulty:BasicLearningObjective:15-2Section:15.4Topic:SyndicateChapter15-RaisingCapital15-713.Thedifferencebetweentheunderwriters'costofbuyingsharesinafirmcommitmentandtheofferingpriceofthosesecuritiestothepubliciscalledthe:A.grossspread.B.underpriceamountC.filingfee.D.newissuepremium.E.offerprice.Refertosection15.4AACSB:N/ABloom's:KnowledgeDiffi