Question 1

The largest cost in a public stock offering is:

Answer

printing expenses.

filing fees with the SEC.

the underwriter’s commission.

legal fees.

2 points 

Question 2

The “wait to go effective” is the time period when:

Answer

the SEC registration statement is being prepared.

the underwriter decides what regulation to file under.

the firm prices the stock for the offering.

the company is waiting for SEC approval after filing the registration statement.

2 points 

Question 3

________ financing includes the personal investment of the owners and is often called “risk capital.”

Answer

Equity

Asset-based

Debt

Growth

2 points 

Question 4

The outstanding publicly held stock is also called:

Answer

the public float.

equity stock.

preferred stock.

available float.

2 points 

Question 5

Working capital can be calculated by:

Answer

Current Asset – Current Liabilities.

Total Asset – Current Liabilities.

Total Liabilities – Total Asset.

Total Asset – Total Liabilities.

2 points 

Question 6

The formal underwriting agreement is signed:

Answer

on the last day before the registration statement becomes effective.

when the statement of registration is filed.

during the road show.

at the time of the letter of intent.

2 points 

Question 7

A foreign stock market that caters to small companies is:

Answer

AIM.

AMX.

the NASDAQ.

DPOX.

2 points 

Question 8

The single most important ingredient in making a successful public offering is:

Answer

choosing a capable underwriter.

negotiating a favorable letter of intent.

preparing a suitable registration statement.

filing Regulation D with the SEC.

2 points 

Question 9

________ is any form of wealth used to produce more wealth.

Answer

Debt

Equity

Capital

Capacity

2 points 

Question 10

In a public offering, the underwriter:

Answer

advises the owner as to the best structure of the business going into the sale.

serves as an adviser and consultant to the small business in preparing the registration statement for the SEC.

is bound to the offering until it is executed.

is listed as one of the officers of the company.

2 points 

Question 11

The two factors that make a deal attractive to venture capitalists are:

Answer

effective marketing strategies and networking opportunities.

high returns and a convenient (and profitable) exit strategy.

high returns and networking opportunities.

a convenient and (profitable) exit strategy and effective marketing strategies.

2 points 

Question 12

Regulation A is best suited when a company is at the ________ stage.

Answer

startup

early

expansion

later

2 points 

Question 13

When filing with the SEC, the initial registration statement:

Answer

prohibits a “road show.”

is filed without share price, proceeds, or commissions listed.

signals the time to sign the formal underwriting agreement.

is generally accepted without corrections by the SEC.

2 points 

Question 14

It typically takes ________ to take a company public.

Answer

30 days

one year

60 to 180 days

two weeks

2 points 

Question 15

________ governs private placements and is designed to reduce the registration requirements for small companies going public.

Answer

Regulation D

Form SB

Form S-1

Regulation A