chap016 - Chapter 016 Raising Capital Multiple Choice...

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Chapter 016 Raising Capital Multiple Choice Questions 1. What is venture capital? a. equity funds from internal sources used to finance high-risk projects b. capital raised from issuing equity securities in order to retire debt securities C . financing for new firms which generally entails high levels of risk d. bank loans used to pay the start-up costs of a new firm e. the use of supplier credit as a means of financing the initial inventory purchases of a new firm SECTION: 16.1 TOPIC: VENTURE CAPITAL TYPE: DEFINITIONS 2. A form filed with the SEC that discloses all material information related to a public offering is called a(n): a. offering prospectus. b. red herring filing. c. indenture contract. d. public release statement. E . registration statement. SECTION: 16.2 TOPIC: REGISTRATION STATEMENT TYPE: DEFINITIONS 3. The SEC regulation that exempts public issues of less than $5 million from most registration requirements is called: a. the Green Shoe Provision. b. the Red Herring Provision. C . Regulation A. d. Regulation Q. e. the Daily Business Exemption. SECTION: 16.2 TOPIC: REGULATION A TYPE: DEFINITIONS 16-1
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Chapter 016 Raising Capital 4. A prospectus is a legal document: a. issued by the SEC authorizing a new issue of securities. b. that must be filed with the SEC prior to issuing any new securities. c. issued by the SEC which outlines the changes required for a registration statement to be approved. D . which describes the details of a proposed security offering along with relevant information about the issuer. e. which explains how new securities can be issued without the permission of the SEC. SECTION: 16.2 TOPIC: PROSPECTUS TYPE: DEFINITIONS 5. What is a red herring? a. newspaper listing of a security offering b. negative comments by the SEC on a proposed security offering c. a debt issue that matures in less than nine months D . a preliminary prospectus e. a preliminary assumption that the small-issues exemption applies to an offering SECTION: 16.2 TOPIC: RED HERRING TYPE: DEFINITIONS 6. Advertisements in a financial newspaper announcing a public offering of securities, along with a list of the investment banks handling the offering, are called: a. red herrings. B . tombstones. c. Green Shoes. d. registration statements. e. letters of comment. SECTION: 16.2 TOPIC: TOMBSTONE TYPE: DEFINITIONS 16-2
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Chapter 016 Raising Capital 7. An issue of securities offered for sale to the general public on a direct cash basis is called a _____ offering. a. best efforts b. firm commitment C . general cash d. rights e. red herring SECTION: 16.3 TOPIC: GENERAL CASH OFFER TYPE: DEFINITIONS 8. A public issue of securities where existing shareholders are given the first opportunity to purchase the new securities is called a _____ offering. a. best efforts b. firm commitment c. general cash D . rights e. priority SECTION: 16.3 TOPIC: RIGHTS OFFER TYPE: DEFINITIONS 9. A corporation's first sale of equity securities to the public is called a(n): a. share repurchase program. b. shelf registration filing.
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chap016 - Chapter 016 Raising Capital Multiple Choice...

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