Which of the following M&A process events is the selling company's management team directly involved in? correct answers Preparation of the CIM
Which of the following refers to a stock sale which is treated as an asset sale for tax purposes thereby allowing the targets assets to be written up an...
Series 79 Tests Set || Already Graded A+.
Which of the following M&A process events is the selling company's management team directly
involved in? correct answers Preparation of the CIM
Which of the following refers to a stock sale which is treated as an asset sale for tax purposes
thereby allowing the targets assets to be written up and depreciated over time? correct answers
Section)? 338
Who takes the lead in preparing the management presentation? correct answers Investment
bankers
Which of the following is true regarding the data room in an M&A deal? correct answers It is
populated by the sell side adviser
Which of the following issues might lead to a prolonged regulatory approvals process for a given
M&A deal? correct answers Sensitive industry and material sales in multiple geographies
FINRA Rule 5130 requires correct answers The book running manager to file an initial list of
distribution participants and their underwriting commitments and also a final list. The final list is
due not later than 3 business days after the offering date
Rule 144A allows correct answers The private resale of restricted securities to QIBs. Offerings
for not require an offering memorandum and securities can be resold immediately
What is an advantage of using a private non competitive block sale as opposed to a competitive
block trade? correct answers Better execution at a predictable price
In order to capture a significant difference In NWV in a valuation analysis, correct answers A
DCF would be a good choice. A company with lower working capital would have a higher
valuation when utilizing a DCF
Return on assets correct answers net income/average total assets
Money market mutual funds securities correct answers Are never exempt from federal regulation
or prospectus delivery requirements. However vast majority of individual securities held by
money market mutual funds are exempt cuz they have maturities if less than 270 days
In a public offering the terms and conditions between syndicate members are in a contract known
as correct answers The agreement among underwriters
Which of the following are helpful sources for creating a universe of comparable companies for
a given private company? correct answers 1. Investor presentation for a clear public comparable
company
2. Fairness opinion for comparable companies
,What does a 1 step merger refer to? correct answers M&A transaction that is approved by a vote
from the targets shareholders
A member firm with a conflict may not participate in a public offering unless the conflict is
prominently disclosed, certain net capital and filing requirements and a QIU participates in the
offering. correct answers However, the QIU requirement is waived if the firm is not the
syndicate manager or if the securities are already publicly traded. If this were an IPO, a QIU
would be required
In a Reg D Rule 506b offering what is the max percentage of total capital that can be raised from
non- accredited investors? correct answers 100%
Company X had the red herring for its public offering relays to go to the printer. However the
registration has not yet been filed. At this time the company publishes a press release containing
information that is not in the red herring. Can the release be considered a FWP? correct answers
Only if the company is a WKSI
only WKSIs are permitted to use correct answers FWP during the pre registration period. In the
cooling off period (after the registration is filed) FWPs May be used by WKSIs, unseasoned and
non reporting issuers. Ineligible issuers can never use FWP
In a fixed price IPO, FINRA rule 5130 requires the book running underwriter to file with FINRA
a final list of distribution participants and their commitments by what deadline? correct answers
3 days after the offering date
FINRA Rule 5130 requires the book running manager to file an initial list of distribution
participants and their underwriting commitments and also a final list correct answers The final
list is due not later than 3 business days after the offering date
A research analyst and investment banker are permitted to correct answers Discuss recent
transactions in a space that they both cover, regulations don't prohibit this
As part of book building, a new issue is often marketed through the use of a series of roadshows.
Which description is accurate when it comes to describing a. Roadshow? correct answers At a
roadshow presentation, the syndicate manager along with the issuers senior management will
present to institutional investors
The cost of putting on a roadshow is correct answers Split between the syndicate and the issuer.
Although a recorded roadshow is a FWP, a blank check company is considered an ineligible
issuer and cannot use a FWP. The syndicate desk is involved in marketing. They do not develop
the offering documents
Which of the following are requirements of an issuer to pursue an exempt offering under rule
147? correct answers 1. The issuer is incorporated in the state
2. At least 80% of the issuers revenues must come from business within the state
3. At least 80% of the issuers assets must be located in the state
, A tombstone advertisement is correct answers Not considered a directed selling effort under
regulation S if the advertisement contains no more information than the issuer's name, amount
and title of the securities being sold, indication of the issuers general type of business, price of
the securities, yield of the securities, name and address of the person placing the advertisement
and whether such person is participating in the distribution, names of the managing underwriters,
the dates upon which the sales commenced and co closed, whether the securities are part of a
rights offering and any legend required by a foreign or US regulatory body
Tender offers just remain open for correct answers 20 BIZ days and board of subject company
must respond within 10 BIZ DAYS
An SEC Rule 165 exemption covers certain written communications made before a registration
is filed for a business combination transaction. To qualify for the exemption, such written
communications must meet which requirements?
I. Be limited to a basic announcement of the offering
II. Be included in a prospectus filed on the date of first use
III.State that the announcement is not an offer
IV. Avoid any mention of offering terms such as amount, time frame or use of proceeds correct
answers 1. Be limited to a basic announcement of the offering
2. Be included in a prospectus filed on the date of first use
3. State that the announcement is not an offer
An exception to registration requirements under the securities ACT of 1933 is made for an issuer
that offers an exchange of its own securities under certain conditions. Which conditions must be
satisfied? correct answers 1. Exchange must be limited to existing shareholders
2. Exchange must not include commission paid to brokers
The agreement among underwriters defines the terms between the syndicate members in an
underwriting of corporate securities. correct answers The underwriting agreement is between the
issuer and the syndicate manager
The selected dealer agreement is between the syndicate manager and the selling group
Generally, all securities must be offered at the POP. They cannot be offered at a discount except
for treasury securities, municipal bonds and investment companies. correct answers Fixed price
IPOs of common stock must be offered to all investors at the POP
In a competitive block trade following on offering, the shares will be purchased by a BD and
offered to the public market at the prevailing price. The appearance of a large supply of shares
for sale on the tape could negatively impact the share price correct answers This can be avoided
by arranging a private non competitive block sale at a stated price. The downside of this
approach can include more concentrated ownership of shares and more regulatory red rape
related to a private sale
Disclosure documents required for public offering correct answers Prospectus (424b)
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