Part 1 (ch23) Questions T/F & Multiple Choice

Go to next Chapter

For students

Below you find many questions to this chapter.

As this link is continuously updated with new questions, you might expect some changes from time to time.

The Questions are based or inspired on either Berk & DeMarzo, Corporate Finance, 5th ed. 2020 or Brealey & Myers, Principles of Corporate Finance, 13th ed. 2020.

If you are interest in getting a .pdf version of your answers, hit Ctrl + P to print

---

Mark T (True) or F (False) in each of the following sentences.

Public companies typically have access to much larger amounts of capital through the public markets.

The sentence is TRUE: The sentence is true.

New issues are highly cyclical.

The sentence is TRUE: The sentence is true.

The ‘fees’ paid to underwriters are a significant part of the transaction costs of an IPO.

The sentence is TRUE: The sentence is true.

The ‘lock-up’ period prevents company insiders from selling their shares in the secondary market for a certain time after the IPO.

The sentence is TRUE: The sentence is true.

Investors in an IPO are guaranteed to receive shares at the offering price.

The sentence is FALSE: The sentence is false.

One of the disadvantages of being a public company is the increased reporting and regulatory compliance requirements.

The sentence is TRUE: The sentence is true.

A controlling shareholder completely loses control of the company after an IPO.

The sentence is FALSE: The sentence is false.

The Dutch auction method allows investors to bid for shares in an IPO, determining the final offer price.

The sentence is TRUE: The sentence is true.

The secondary market involves the trading of existing shares among investors.

The sentence is TRUE: The sentence is true.

A cash offer occurs when new shares are offered only to existing shareholders.

The sentence is FALSE: The sentence is false.

Go to next Chapter