Question 1The largest cost in a public stock offering is:Answerprinting expenses.filing fees with the SEC.the underwriter’s commission.legal fees.2 points Question 2The “wait to go effective” is the time period when:Answerthe 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.”AnswerEquityAsset-basedDebtGrowth2 points Question 4The outstanding publicly held stock is also called:Answerthe public float.equity stock.preferred stock.available float.2 points Question 5Working capital can be calculated by:AnswerCurrent Asset – Current Liabilities.Total Asset – Current Liabilities.Total Liabilities – Total Asset.Total Asset – Total Liabilities.2 points Question 6The formal underwriting agreement is signed:Answeron 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 7A foreign stock market that caters to small companies is:AnswerAIM.AMX.the NASDAQ.DPOX.2 points Question 8The single most important ingredient in making a successful public offering is:Answerchoosing 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.AnswerDebtEquityCapitalCapacity2 points Question 10In a public offering, the underwriter:Answeradvises 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 11The two factors that make a deal attractive to venture capitalists are:Answereffective 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 12Regulation A is best suited when a company is at the ________ stage.Answerstartupearlyexpansionlater2 points Question 13When filing with the SEC, the initial registration statement:Answerprohibits 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 14It typically takes ________ to take a company public.Answer30 daysone year60 to 180 daystwo weeks2 points Question 15________ governs private placements and is designed to reduce the registration requirements for small companies going public.AnswerRegulation DForm SBForm S-1Regulation A
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