BUSI 320 Read & Interact Block, Hirt, & Danielsen Chapter 15 solutions complete answers

BUSI 320 Read & Interact Block, Hirt, & Danielsen Chapter 15 solutions complete answers

 

In the 1970s, many small companies decided to go private in order to save money on annual report expenses, legal and accounting fees, and security analysts meetings.

 

Privatization outside the US typically refers to the selling of companies previously owned by governments to the public.

 

involves the selling of securities directly to investors, rather than through the security markets.

 

The investment banker is not concerned with the aftermarket of an offering, because they have already received their profit from the issuance.

 

The               is comprised of many investment banks that share the burden of risk and aid in the distribution of securities.

 

The process of        involves investor bankers taking public the companies that had been previously owned by government.

 

Regulatory costs for public companies are typically       , and focus is placed on        term results.

 

Glass-Steagall was eventually repealed because American investment banks could not compete with __________.

 

What are the disadvantages to being a small, pubic company?

 

A public firm typically goes private when it is acquired by a __________ company or when it is purchased by a private ________ firm.

 

Investment banks have become very large due to __________ to raise capital. An investment bank's large size allows it to take additional __________ to satisfy customer needs.

 

The process of ___________ involves investor bankers taking companies public.

 

Identify all of the methods of distribution wherein an investment banker does not assume the risk of distribution.

 

When a company issues additional shares, typically __________.

 

The Glass-Steagall Act forced financial institutions to separate __________ banking from investment banking activity.

 

An investment banker will assist in the sale of large blocks of stock by existing shareholders because    .

 

In addition to the underwriting spread, the issuer should bear    .

 

An investment banker typically prices additional issues of equity below the current market price    .

 

Public companies have access to a _________ pool of investors to raise capital versus private companies.

 

What are the disadvantages to being a public company?

 

A secondary offering occurs _________ an IPO, and often includes shareholder __________ and additional shares sold by the company.

 

An underwriting syndicate    .

 

An investment banker acting as an agent for a corporation is mandated to negotiate the     possible deal for the client.

 

A shelf registration    .

 

In addition to an analysis of a company's financial and industry characteristics, an investment banker will rely on _________ when pricing the security.

 

Often after shares have started trading, the investment banker will __________ a market in the security to ensure a __________ market.

 

The investment banker is able to sell large blocks of shared because he or she     the stock below the current market prices.

 

Which of the following are advantages to being a public company?

 

Earnings dilution from additional share issues __________

 

Investment bankers provide advice to clients on    .

 

If a stock rises significantly on its first day of trading, this means it was _________ by the investment banker. Share prices typically ________ after a secondary offering is announced.

 

The investment banker serves as the link between corporations in     of funds and investors.

 

How is a private placement of equity different from a public offering?

 

The managing         of an initial public offering is responsible for stabilizing the offering during the distribution period and may accomplish this by repurchasing securities.

 

Which of the following are advantages of a private placement over a public offering?

 

The underwriting spread    .

 

By underwriting a security issues, an investment bank takes on the     of selling the new issue.

 

The investment banker    .

 

 

1.
After an IPO or secondary offering, a period of market stabilization occurs where___________
 
 
3.
Companies are able to raise capital at a lower cost with a private placement because investors are purchasing liquid assets
 
 
4.
Equity capital generally has a larger underwriting spread than debt capital because
 
 
5.
Fees in addition to the underwriting spread include
 
 
6.
A firm is said to be going private if they have transitioned from being a _________ company to a ____________ company
 
 
7.
Glass-Steagall Act forced financial institutions to separate ___________ banking from investment banking activity
 
 
14.
An investment banker acts as an agent when the corporation is
 
 
15.
The investment banker is concerned with the aftermarket performance of a security because he must ___________ relationships with the ___________ of security in order to have future business
 
 
17.
The investment banker serves as the link between corporations that __________ funds and investors who _________ funds
 
 
20.
The investment banker will analyze a firms industry, _____________ characteristics, and anticipated__________ to determine a company's ______________
 
 
22.
The investment banker will buy and sell a newly distributed security in the open market
 
 
23.
An investment banker will often __________ shares in the open market after an IPO to ____________ the market and __________ the members of the underwriting syndicate
 
 
25.
IPO's typically have _________ first day returns and secondary offerings typically occur after a stock has _______ in value
 
 
26.
Market stabilization practices are a ____________ form of marketing manipulation
 
 
28.
The primary offering of securities is commonly referred as the _________, the secondary offering of securities may or may not include ___________ sales
 
 
29.
Privatization in an international context refers to the sale of ______________ owned assets to ___________ investors
 
 
30.
Public companies have access to a __________ pool of __________ to raise capital versus private companies
 
 
 
 
 
 
 
 
 

39.
The underwriting syndicate is comprised of many investment banks that _________ the risk and ___________ in distribution
 
 
46.
Which of the following would be considered leveraged buyout
 
 
 

 

1.
After a leveraged buyout, the private company usually goes through a corporate __________ wherein assets are sold to reduce the company's debt.
 
 
3.
By underwriting a security issue, an investment bank takes on the __________ of selling the new issue.
 
 
4.
Companies are able to raise more capital at a lower cost with a private placement because investors are purchasing liquid assets.
 
 
6.
Equity capital generally has a larger underwriting spread than debt capital because __________.
 
 
7.
A firm is said to be "going private" if they have transitioned from being a __________ company to a __________ company.
 
 
12.
If an investment banker underwrites securities for $25 per share and sells these securities for $26 per share to the public, the investment banker has made __________ dollar per share which is known as the underwriting __________.
 
 
15.
An investment banker acts as an agent when the corporation is
 
 
16.
The investment banker is concerned with the after market performance of a security because he must maintain relationships with the buyers of the securities in order to have future business.
 
 
17.
Investment bankers often _________ clients on the types of securities to be sold and on the __________ of the sale.
 
 
19.
An investment banker typically prices additional issues of equity below the current market price __________.
 
 
20.
The investment banker will analyze a firm's industry, __________ characteristics, and anticipated __________ to determine a company's __________.
 
 
22.
The investment banker will buy and sell a newly distributed security in the open market
 
 
24.
IPOs typically have __________ first day returns and secondary offerings typically occur after a stock has __________ in value.
 
 
26.
Market stabilization practices are a legal form of market manipulation.
 
 
27.
The primary offering of securities is commonly referred to as the __________, the secondary offering of securities may or may not include shareholders' __________ sales.
 
 
28.
Private placement involves the selling of securities __________ to investors, rather than through the security markets.
 
 
33.
Secondary Offerings
 
 
 
 
 
 
 
 
 

35.
A shelf registration allows a company to take advantage of __________ conditions and issue shares over a __________ year period.
 
 
38.
The underwriting syndicate is compromised of many investment banks that __________ the burden of risk and __________ in the distribution.
 
 
41.
When acting as an underwriter, the investment banker provides a firm __________ to purchase the securities from the corporation thereby taking on the __________ associated with selling the securities to the public.
 
 
43.
Which of the following would be considered a leveraged buyout?