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31.Which of the following not the responsibility of the lead

Question : 31.Which of the following not the responsibility of the lead : 1404045

 

 

31.Which of the following is not the responsibility of the lead underwriter for an equity issuance?

a.price stabilization of the issue

b.exercises discretion over the distribution of shares for sale among the syndicate and the selling group

c.must buy the shares in the green shoe option

d.many times serves as the market maker for trading in the issuers securities

 

 

 

32.Which of the following is not an important consideration when an underwriter is trying to establish the price for an initial public offering?

a.the underwriter’s reputation

b.the value of the firm

c.the demand for the securities of the issuer

d.providing the absolute maximum price possible for the issuer of the shares

 

 

 

33.The vast majority of initial public offerings have underwriting spreads that cost the firm what percentage of the net capital raised?

a.0.5%

b.7.0%

c.7.5%

d.8.0%

 

 

 

 

34.The Over-the-Counter Market for trading equity securities is located

a.in New York City.

b.in Chicago.

c.in Boston.

d.none of the above

 

 

 

35.The largest stock exchange in the world is

a.the London Stock Exchange.

b.the New York Stock Exchange.

c.the NASDAQ.

d.the Paris Bourse.

 

 

 

36.If viewing a stock quote from the Wall Street Journal, the columns labeled “HI” and “LO” refer to

a.the highest and lowest prices at which the stock was sold in the last fifty-two weeks.

b.the highest and lowest prices at which the stock was sold in the last six months.

c.the highest and lowest prices at which the stock was sold in the last month.

d.the highest and lowest prices at which the stock was purchased in the last month.

 

 

 

37.When valuing a preferred stock, the type of security that we treat the preferred stock like, for valuation purposes, is

a.a bond.

b.a perpetuity.

c.a common stock.

d.none of the above.

 

 

 

38.AlwaysAround Co. has just issued a preferred stock that pays an annual $4 dividend. The first dividend will be received one year from today. If the required rate of return on this stock is 5%, then what is the price of the stock?

a.$3.81

b.$4.20

c.$80.00

d.none of the above

 

 

 

39.The Perp, Inc. has a preferred stock that will pay its next annual $5 dividend one year from now. The current price of the stock is $110. What is the required rate of return on the stock?

a.4.55%

b.4.00%

c.5.50%

d.22.00%

 

 

 

40.You are approached about purchasing a share of common stock in a company that will definitely go out of business exactly 2 years from today. The company is anticipated to pay a $10 dividend one year from now and a $15 dividend two years from now (immediately before it goes out of business). What price are you willing to pay for the stock if the required rate of return on the stock is 5%?

a.$22.68

b.$23.13

c.$23.81

d.$25.00

 

 

 

 

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