CHAPTER_18_INITIAL_PUBLIC_OFFERINGS_INVESTMENT_BANKING_AND_FINANCIAL_RESTRUCTURING

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1、CHAPTER18—INITIALPUBLICOFFERINGS,INVESTMENTBANKING,ANDFINANCIALRESTRUCTURING1. Ifitsmanagersmakeatenderofferandbuyallsharesthatwerenotheldbythemanagementteam,thisiscalledaprivateplacement. a. True b. FalseANSWER:  FalseRATIONALE:  False.Inaprivateplacement,

2、securitiesaresoldtooneorafewinvestors,generallyinstitutionalinvestors.Privateplacementsaremostcommonwithbonds,buttheyalsooccurwithstocks.POINTS:  1DIFFICULTY:  Difficulty:EasyLEARNING OBJECTIVES:  INTE.GENE.16.114-LO:18-5NATIONAL STANDARDS:  UnitedStates-BU

3、SPROG:ReflectiveThinkingSTATE STANDARDS:  UnitedStates-AK-DISC:Investmentsandhybridfin-DISC:InvestmentsandhybridfinancingLOCAL STANDARDS:  UnitedStates-OH-DefaultCity-TBATOPICS:  PrivateplacementsKEYWORDS:  Bloom’s:Knowledge2. Goingpublicestablishesamarketv

4、alueforthefirm'sstock,anditalsoensuresthataliquidmarketwillcontinuetoexistforthefirm'sshares.Thisisespeciallytrueforsmallfirmsthatarenotwidelyfollowedbysecurityanalysts. a. True b. FalseANSWER:  FalseRATIONALE:  False.Goingpublicdoesestablishthefirm'smarket

5、value,butitdoesnotensurethataliquidmarketwillcontinuetoexist,andthisisespeciallytrueforsmallfirmsthatarenotwidelyfollowed.POINTS:  1DIFFICULTY:  Difficulty:ModerateLEARNING OBJECTIVES:  INTE.GENE.16.115-LO:18-2NATIONAL STANDARDS:  UnitedStates-BUSPROG:Refle

6、ctiveThinkingSTATE STANDARDS:  UnitedStates-AK-DISC:Investmentsandhybridfin-DISC:InvestmentsandhybridfinancingLOCAL STANDARDS:  UnitedStates-OH-DefaultCity-TBATOPICS:  GoingpublicKEYWORDS:  Bloom’s:Comprehension3. ThecostofmeetingSECandpossiblyadditionalsta

7、tereportingrequirementsregardingdisclosureoffinancialinformation,thedangeroflosingcontrol,andthepossibilityofaninactivemarketandanattendantlowstockpricearepotentialdisadvantagesofgoingpublic. a. True b. FalseANSWER:  TruePOINTS:  1DIFFICULTY:  Difficulty:Mo

8、derateLEARNING OBJECTIVES:  INTE.GENE.16.115-LO:18-2CengageLearningTesting,PoweredbyCogneroPage 15CHAPTER18—INITIALPUBLICOFFERINGS,INVESTMENTBANKING,ANDFINANCIALRESTRUCTURINGNATIONAL STANDARDS:  United