Question 1

Going public means a company is required to disclose information to the public for investigation.

Accepted Answer

A) True 
 B)False

Question 2

The ICE Futures Canada, originated from the Winnipeg Stock Exchange, is Canada's exchange trading derivatives products.

Accepted Answer

A) True 
 B)False

Question 3

Why does underpricing always occur for an IPO?

Accepted Answer

A)  to guarantee sales by underwriters 
B)  to discourage oversubscription from investors 
C)  to reward customers by issuers 
D)  to protect investors from deceptive firms 
A)  to guarantee sales by underwriters 
B)  to discourage oversubscription from investors 
C)  to reward customers by issuers 
D)  to protect investors from deceptive firms

Question 4

The secondary market is a second-hand market in which securities are sold by the first and subsequent buyers.

Accepted Answer

A) True 
 B)False

Question 5

Scenario: ABC Waste
ABC Waste (ABCW) is considering refunding a $50,000,000, annual payment, 14% coupon, 30-year bond issue that was issued 5 years ago. It has been amortizing $3 million of flotation costs on these bonds over their 30-year life. The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market. A call premium of 8.4% would be required to retire the old bonds, and flotation costs on the new issue would amount to $3 million. ABCW's marginal tax rate is 40%. The new bonds would be issued when the old bonds are called.
-Refer to Scenario: ABC Waste. What will the after-tax annual interest savings for ABCW be if the refunding takes place?

Accepted Answer

A)  $664,050 
B)  $699,000 
C)  $768,900 
D)  $845,790 
A)  $664,050 
B)  $699,000 
C)  $768,900 
D)  $845,790

Question 6

Since providing updated information about company activities and status is costly, it has absolutely no advantage for firms.

Accepted Answer

A) True 
 B)False

Question 7

For providing funds to start-up firms, venture capital investors would like to be equity holders getting stocks rather than just being lenders.

Accepted Answer

A) True 
 B)False

Question 8

What is likely to happen when a shelf prospectus system is adopted for corporations issuing securities?

Accepted Answer

A)  The time for raising capital will increase. 
B)  The competition among underwriters will increase. 
C)  The profit of the issuers will decrease. 
D)  The underwriting expenses will increase. 
A)  The time for raising capital will increase. 
B)  The competition among underwriters will increase. 
C)  The profit of the issuers will decrease. 
D)  The underwriting expenses will increase.

Question 9

Which statement about leveraged buyouts is true?

Accepted Answer

A)  LBOs will not benefit public shareholders. 
B)  Incumbent management may be penalized by LBOs. 
C)  LBOs do not affect the asset values of the company. 
A)  LBOs will not benefit public shareholders. 
B)  Incumbent management may be penalized by LBOs. 
C)  LBOs do not affect the asset values of the company.

Going public means a company is required to disclose information to the public for investigation.

The ICE Futures Canada, originated from the Winnipeg Stock Exchange, is Canada's exchange trading derivatives products.

Why does underpricing always occur for an IPO?

The secondary market is a second-hand market in which securities are sold by the first and subsequent buyers.

Since providing updated information about company activities and status is costly, it has absolutely no advantage for firms.

For providing funds to start-up firms, venture capital investors would like to be equity holders getting stocks rather than just being lenders.

What is likely to happen when a shelf prospectus system is adopted for corporations issuing securities?

Which statement about leveraged buyouts is true?

An Overview of Financial Management and the Financial Environment

Financial Statements, Cash Flow, and Taxes

Analysis of Financial Statements

Time Value of Money

Financial Planning and Forecasting Financial Statements

Bonds, Bond Valuation, and Interest Rates

Risk, Return, and the Capital Asset Pricing Model

Stocks, Stock Valuation, and Stock Market Equilibrium

The Cost of Capital

The Basics of Capital Budgeting: Evaluating Cash Flows

Cash Flow Estimation and Risk Analysis

Capital Structure Decisions

Distributions to Shareholders: Dividends and Repurchases

Lease Financing

Capital Market Financing: Hybrid and Other Securities

Working Capital Management and Short-Term Financing

Current Asset Management

Financial Options and Applications in Corporate Finance

Decision Trees, Real Options, and Other Capital Budgeting Topics

Derivatives and Risk Management

International Financial Management

Corporate Valuation, Value-Based Management, and Corporate Governance

Mergers, Acquisitions, and Restructuring

Filters

Exam 14: Initial Public Offerings, Investment Banking, and Financial Restructuring

Going public means a company is required to disclose information to the public for investigation.

The ICE Futures Canada, originated from the Winnipeg Stock Exchange, is Canada's exchange trading derivatives products.

Why does underpricing always occur for an IPO?

The secondary market is a second-hand market in which securities are sold by the first and subsequent buyers.

Since providing updated information about company activities and status is costly, it has absolutely no advantage for firms.

For providing funds to start-up firms, venture capital investors would like to be equity holders getting stocks rather than just being lenders.

What is likely to happen when a shelf prospectus system is adopted for corporations issuing securities?

Which statement about leveraged buyouts is true?

An Overview of Financial Management and the Financial Environment

Financial Statements, Cash Flow, and Taxes

Analysis of Financial Statements

Time Value of Money

Financial Planning and Forecasting Financial Statements

Bonds, Bond Valuation, and Interest Rates

Risk, Return, and the Capital Asset Pricing Model

Stocks, Stock Valuation, and Stock Market Equilibrium

The Cost of Capital

The Basics of Capital Budgeting: Evaluating Cash Flows

Cash Flow Estimation and Risk Analysis

Capital Structure Decisions

Distributions to Shareholders: Dividends and Repurchases

Lease Financing

Capital Market Financing: Hybrid and Other Securities

Working Capital Management and Short-Term Financing

Current Asset Management

Financial Options and Applications in Corporate Finance

Decision Trees, Real Options, and Other Capital Budgeting Topics

Derivatives and Risk Management

International Financial Management

Corporate Valuation, Value-Based Management, and Corporate Governance

Mergers, Acquisitions, and Restructuring

Filters