Series 79 Diagnostic Exam 3 || All Answers Are Correct 100%.
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Series 79 Diagnostic
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Series 79 Diagnostic
Brokers Dealer A and Broker Dealer B are co-bookrunners on a debt offering for XYZ Co, Inc. BD A has a 30% allocation, BD B has a 20% allocation, and other underwriters share the remainder.
During price talk between the co-bookrunners and XYZ, the deal is expected to raise between $400 million an...
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Series 79 Diagnostic Exam 3 || All Answers Are Correct
100%.
Brokers Dealer A and Broker Dealer B are co-bookrunners on a debt offering for XYZ Co, Inc.
BD A has a 30% allocation, BD B has a 20% allocation, and other underwriters share the
remainder.
During price talk between the co-bookrunners and XYZ, the deal is expected to raise between
$400 million and $900 million of debt at a rate of UST +80. The deal ends up being priced at
$700 million.
XYZ is disappointed that the final pricing was below the top end of the range. Who is
responsible for the $200 million in debt that is unsold? correct answers Neither Broker Dealer A
nor B
In a business combination that requires a vote of shareholders to approve a proposed deal,
involving a change of securities, a prospectus correct answers must be delivered prior to the vote
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
Which of the following is a prohibited activity under Regulation M? correct answers Entering a
stabilization bid without notifying the SEC
Company J is a Japanese company listed on the Tokyo Stock Exchange. Company J would like
to raise additional equity by selling securities in the United States and would like to target
accredited Japanese investors in the U.S. but would also prefer to avoid registering with the SEC.
The best way to do so would be via a(n) correct answers Regulation D offering
A company plans on raising $40 million in a private placement, and has targeted different classes
of investors, as follows:
$10 million sold to mutual funds.
$10 million sold to hedge funds.
$20 million sold to 35 non-accredited investors, all of whom have a purchaser representative.
Which of the following statements regarding this transaction is correct? correct answers This
transaction is permitted and complies with applicable private placement regulations
As part of Rule 144A, the SEC created another category of financially sophisticated investors
known as correct answers qualified institutional buyers
The safe harbor exemptions under Regulation S are subject to which of the following general
conditions? correct answers I. The seller reasonably believes the buyer is offshore at the time of
the offer or sale
III. No directed selling efforts are be made in the U.S. by the issuer, investment bank, advisor, or
affiliate
, The target company in a tender offer wants to express no opinion (remain neutral) in regard to
the offer. Which of the following statements is TRUE regarding this decision? correct answers It
is allowed but must be communicated to the company's shareholders
A brokerage firm that has been registered with the SEC correct answers I. Is subject to the SEC's
regulation and oversight
III. Can sell both exempt and non-exempt securities
A person that is associated with a Member firm and has passed the Series 79 is qualified for all
of the following activities EXCEPT correct answers trading derivatives on behalf of institutional
clients
In which of the following situations would it be appropriate for a registered representative to
lend money to a client without receiving permission from the firm? correct answers The client is
a financial institution engaged in the business of lending money
All of the following records must be maintained by a broker-dealer EXCEPT correct answers
Prospectuses for underwritten deals where the broker-dealer is the syndicate manager
DEF Company, Inc. recently announced basic earnings per share of $1.75 and diluted earnings
per share of $1.23 for its most recently completed fiscal year. It also pays $0.08 quarterly
dividend. What is the company's dividend payout ratio? correct answers 18.00%
($0.08 * 4) / $1.75 = 18%
Brunswick issues a Series A $2.40 cumulative convertible preferred voting stock. This stock
correct answers I. Is convertible into common stock
II. Pays dividends in arrears
Which of the bonds below would subject an investor to the greatest amount of call risk? correct
answers A 6% bond with no call premium
At the end of 2013, Company A has retained earnings of $30,000,000. During 2014 the company
earns pre-tax income of $8,500,000. Historically, the company has not paid dividends. However,
in December, 2014, the company announces a change in dividend policy whereby beginning in
2015 it will pay $0.25 per share on 2,500,000 outstanding shares, to be paid in January, 2015.
The company has a marginal tax rate of 40% and a corporate tax rate of 35%. What is Company
A's retained earnings at the end of 2014? correct answers $35,100,000
A company has paid a dividend of $0.50 per share in each of the last four quarters. The board of
directors has just raised the dividend to $0.75 per share, which it will pay in the next quarter and
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