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BLAW 3310 CH.18 REVIEW questions and answers verified answers||Latest 2024/2025
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BLAW 3310 CH.18 REVIEW questions and answers verified answers||Latest 2024/2025
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BLAW 3310 CH.18 REVIEWCorporate finance - ANSthe business function of obtaining funds for a company and managing
them to accomplish the company's objectives
blue sky laws - ANSState laws that regulate the offering and sale of securities for the protection
of the public.
equity financing - ANSRaising funds through the sale of company stock. a purchaser of shares
of stock gains an ownership interest in the corporation.
debt financing - ANSobtained by borrowing money from large lenders, such as banks and
insurance companies
securities - ANSstocks and bonds
Securities and Exchange Commission (SEC) - ANSthe agency charged with enforcing and
administering federal securities laws. An independent agency that has five members appointed
by the president for five-year terms.
Howey test - ANSa test to determine when an investment is a security for the purposes of
federal regulation.
Howey test elements: - ANSAn investment is classified as a security for purpose
of federal regulation if it contains four basic elements:
1. An investment of money
2. In a common enterprise
3. With an expectation of profits
4. Generated by the efforts of persons other than the investors
SEC disclosure requirements - ANSFiling a registration statement with the SEC
registration statement for a new security offering requires: - ANSprospectus and detailed
information required by the SEC.
prospectus - ANS(called Schedule A) condenses the longer registration statement provided to
the SEC and helps investors evaluate a security.
SEC review and approval - ANSThe SEC does not rule on the merit of an offering; that is, it
does not give any opinion about the likelihood of success of a proposed business. Registration
comes into effect 20 days after it is filed.
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