Chapter 15 Test Bank

Chapter 15 Test Bank - CHAPTER 15 Raising Capital I....

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CHAPTER 15 Raising Capital I. DEFINITIONS Topic: VENTURE CAPITAL 1. The financing provided for start-up, often high-risk, private business enterprises is called: A) Venture capital. B) Junk bonds. C) Flotation costs. D) Initial public offerings. E) Financial futures. Answer: A Topic: REGISTRATION STATEMENT 2. The document(s) filed with the SEC disclosing all material information relating to the firm making an offering of public securities is called the _______________. A) offering prospectus B) registration statement C) red herring filing D) indenture contract E) SEC Form 13-J Answer: B Topic: REGULATION A 3. The SEC filing exemption of most registration materials for public offerings of securities less than $5 million in value is called: A) The Green Shoe Provision. B) The Red Herring Provision. C) Regulation A. D) Regulation Q. E) The Open Markets Exemption. Answer: C Topic: PRELIMINARY PROSPECTUS 4. The preliminary prospectus distributed to investors during the SEC waiting period is often called a(n): A) Indenture contract. B) Signature form 10-W. C) Letter of comment. D) Red herring. E) Green shoe. Answer: D
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Topic: LETTER OF COMMENT 5. The ______________ is transmitted to the prospective issuing firm by the SEC when they have suggestions for changes to the registration statement and/or its supporting documents. A) indenture contract B) Green Shoe statement C) Regulation A statement D) preliminary prospectus E) letter of comment Answer: E Topic: PROSPECTUS 6. The legal document describing details of the issuing corporation and its security offering to potential investors is called the _________________. A) offering prospectus B) tombstone advertisement C) letter of comment D) Regulation A statement E) rights offering Answer: A Topic: TOMBSTONE 7. Advertisements in, for example, The Wall Street Journal announcing a corporation's 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. Answer: B Topic: GENERAL CASH OFFER 8. An issue of securities offered for sale to the general public on a direct cash basis is called a: A) Best efforts offer. B) Firm commitment offer. C) General cash offer. D) Rights offer. E) Red herring offer. Answer: C
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Topic: RIGHTS OFFER 9. A public offering of securities where existing shareholders of the firm have the first opportunity to buy the new securities, exclusive from the general public, is called a: A) Best efforts offer. B) Firm commitment offer. C) General cash offer. D) Rights offer. E) Red herring offer. Answer: D Topic: INITIAL PUBLIC OFFERING 10. A corporation's first sale of equity made available to the public is called a(n): A) Share repurchase program. B)
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This note was uploaded on 05/10/2011 for the course FIN 3716 taught by Professor Fang during the Spring '10 term at LSU.

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Chapter 15 Test Bank - CHAPTER 15 Raising Capital I....

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