The rule addressing the required disclosures to investors in a corporate transaction is known as correct answers Regulation M-A. Regulation M-A requires investors to receive a summary terms sheet with a series of plain English disclosures regarding the proposed transaction. It applies to issuer ten...
the rule addressing the required disclosures to in
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Series 79 Deck 1 || All Correct.
The rule addressing the required disclosures to investors in a corporate transaction is known as
correct answers Regulation M-A. Regulation M-A requires investors to receive a summary terms
sheet with a series of plain English disclosures regarding the proposed transaction. It applies to
issuer tender offers and certain going-private transactions.
Net new shares under treasury stock method correct answers = number of shares to which option
holders are entitled * (mkt price - exercise price / mkt price)
What does the bring-down session prior to closing refer to? correct answers The session where
the accuracy of parties' reps and warranties is confirmed. A bring-down session, also known as a
"bring-down due diligence session" is a session where the accuracy of the reps and warranties
(typically the seller's) are confirmed. It is often telephonic and routine, led by selected advisers
and conducted just prior to the closing of the deal to ensure that key financial data and other
material information for the deal cannot change in between the bring-down session and closing.
On a related note, the "bring-down" condition in the Definitive Agreement is the closing
condition related to ensuring the accuracy of the other party's reps and warranties as of the
closing date.
Which of the following best describes a penalty bid? correct answers An underwriter loses their
selling concession for shares that are immediately flipped in the secondary market. A penalty bid
is a type of stabilization bid launched by the syndicate manager or another underwriter. If a
stabilization bid is identified as a penalty bid, a syndicate member loses their compensation for
shares that are flipped (i.e. sold immediately after the deal is effective) back to the stabilization
agent. This encourages underwriters to offer shares to investors who are likely to hold them
rather than immediately trade them.
A "mini-tender" offer is subject to minimum filing and dislosure requirements, provided that it
seeks to acquire correct answers less than 5% of the outstanding shares. A "mini-tender" offer
can avoid some filing and disclosure requirements, but it must not seek to acquire more than 5%
of the outstanding shares of the target company.
An underwriter claims that on the effective date it had reasonable grounds for believing that
statements made in a registration statement were true, even though they in fact were false. The
standard for proving the "reasonable grounds" in this case is correct answers prudent man. The
"burden of proof" standard that must be met is the "prudent man" standard. It can be used by
anyone except the issuer to prove that there were reasonable grounds for believing statements in
the registration statement were true as of the effective date.
An investor in an IPO paid $20 per share. The investor then claims there was untrue or omitted
information contained in the prospectus, and she sues the underwriter who sold the shares. She
ultimately sold the shares at $15 a share, a loss of $5 per share. What damages is she entitled to
claim under Section 12 of the Securities Act of 1933? correct answers $5 per share plus interest.
Damages claimed under Section 12 for untrue or omitted information in prospectuses and oral
communications is generally limited to consideration paid (with interest) less income or
, consideration received. The investor can be made whole, though there is no provision for
punitive damages.
Issuers who are permitted to file shelf registration statements which become automatically
effective without prior SEC review are known as correct answers Well-known seasoned issuers.
By qualifying as a well-known seasoned issuer (WKSI), an issuer can execute continuous
securities offerings under one "shelf registration." This allows the issuer to raise capital in a more
opportunistic and timely fashion, without waiting for SEC review.
When an IPO trades above the Public Offering Price which of the following is the most likely
way the underwriter will cover an oversold transaction? correct answers Greenshoe clause. When
a new issue trade above the public offering price, the underwriter is likely to exercise a
Greenshoe clause. This allows the underwriter to purchase up to 15% more shares from the
issuer at the POP, thereby avoiding a scenario where the underwriter is required to purchase
additional shares in the open market at a price higher than the public offering price.
How often does Form 13F need to be filed? correct answers Within 45 days of the end of each
calendar quarter. Form 13F is initially filed at the end of the first year that the manager exceeds
$100 million in discretionary assets. Subsequently, the manager must then file within 45 days of
the end of each calendar quarter. The manager is required to disclose all long equities positions.
For a non-automatic shelf registration, what is the maximum period of time that may elapse after
the effective date of the prior registration in order to offer securities? correct answers 180 days
after the third anniversary. A non-automatic shelf registration may be offered for up to 180 days
after the third anniversary of the prior registration's effective data. The filing of a new
registration statement will "refresh" this period.
under the dividend discount model, stock price= correct answers last years dividend * (1+growth
rate) / (discount rate - growth rate)
If a syndicate manager expects the closing of an offering to be delayed, the firm is required to
notify FINRA of this fact by when? correct answers No later than the scheduled closing date. If a
syndicate manager expects the closing of an offering to be delayed; it is required to notify
FINRA's Corporate Finance Department immediately, but no later than the scheduled closing
date.
The restricted period in case of a merger is based on the _____________________ shareholder's
vote correct answers target company's
Subchapter S Corporations are permitted to have no more than ___________________ correct
answers 100 shareholders and all shareholders must be individual investors. The benefit for
Subchapter S Corporations is pass-through of gains and losses to investors.
A cram-down is correct answers a plan that is forced on creditors by the court, against their will.
A plan that is crammed-down on creditors must be approved by at least one impaired creditor
class that votes in favor of the plan. This requires that within the impaired class at least two-
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