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CH16AQZV7 - Chapter 16 Quiz A Student Name 1 Venture...

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Chapter 16 Quiz A Student Name _________________________ Student ID ____________ ________ 1. Venture capital: a. is generally provided on a long-term basis. b. is often provided in stages. c. generally funds growth for mature firms. d. is provided solely by individuals. ________ 2. The document provided to potential investors which provides information on a security issue is called the: ________ 3. A(n) _____offering is a securities offering wherein the investors determine the security price. ________ 4. Your firm is offering 10,000 shares of stock in an initial public offering. The underwriters have agreed to a firm commitment offering with a 7 percent spread and a $26 offering price. When the offering was complete, the underwriters sold a total of 9,500 shares to the general public. The stock opened on the first day of trading at $28 a share. How much did your firm receive from this offering? ________ 5. Allison & Sons wants to raise $5 million through a rights offering. One right will be issued for each of the 1.1 million shares of stock that are outstanding. The subscription price is $40 and the current market price is $44. How many rights will be needed to buy one new share of stock? a. 8.5 rights b. 8.8 rights c. 9.3 rights d. 9.7 rights ________ 6. Blythe, Inc. currently has 500,000 shares of stock outstanding at a market price of $30 a share. The company wants to raise $2 million in a rights offering. The subscription price is $25 a share. One right will be granted for every share of outstanding stock. What is the value of one right? ________ 7. You currently own 6 percent of the 100,000 shares of outstanding stock in Mytle, Inc. The firm has announced that it is offering an additional 20,000 shares to the public. What will your new ownership position be if you decide not to participate in this offering? ________
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