Last updated: 28/07/2025 15:47
The questions are based on or inspired by the following references:
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📘 Part 1 (until Midterm)
Answer the following questions based on the discussions in class.
Q1.
✅ Correct: A. A venture capital firm is a limited partnership that raises capital to invest in private startups.
Q2.
✅ Correct: C. An IPO is the first time a company sells equity shares to the public.
Q3.
✅ Correct: B. Rights offerings give current shareholders the opportunity to maintain their ownership percentage.
Q4.
✅ Correct: C. Liquidation preference ensures investors are repaid before common shareholders in case of company sale or bankruptcy.
Q5.
✅ Correct: A. The road show is a marketing campaign to build demand and gather pricing information.
Q6.
✅ Correct: D. Companies often go public to access capital from public markets and fund future growth.
Q7.
✅ Correct: E. Public companies face higher regulatory burdens and disclosure obligations.
Q8.
✅ Correct: B. Underpricing means the IPO share price is set below expected market value, often leading to a first-day stock price increase.
Q9.
✅ Correct: C. Investment banks serve as underwriters, pricing and distributing IPO shares.
Q10.
✅ Correct: D. The lead underwriter manages the offering, coordinates marketing, and distributes shares to investors.