Form S-4 correct answers business combinations and exchange offers
Schedule 13E-3 correct answers "going private" LBO
EV is ______________ of capital structure correct answers independent
Are US government or agency securities exempt from SEC registration correct answers Yes, both US gover...
EV is ______________ of capital structure correct answers independent
Are US government or agency securities exempt from SEC registration correct answers Yes,
both US government and agency securities are exempt from SEC registration
Public appearances include correct answers seminars, forums, media interviews, speaking
engagements, or print media articles in which an analyst makes recommendations or offers
opinions about securities; also includes conference calls, interactive internet forums presented to
15 or more people, and non-password protected webcasts
The restricted period notification period under Regulation M must include correct answers 1)
restricted distribution participants and their affiliates
2) intent to engage in stabilization
3) intent to impose a penalty bid
How can equity holders have a say in an insolvent company's restructuring under a Ch 11 filing
correct answers File a proof of interest with the court
What is the largest greenshoe provision an underwriter can undertake correct answers 15% of the
original issue size
When can a greenshoe provision be exercised correct answers Within 30 days of the effective
date
Greenshoe provisions must be offered at the correct answers POP
The safe harbor provision under Rule 10b-18 applies to correct answers common stock only of
the issuer
Inventory turnover = correct answers COGS / average inventory (how many times a company
rolls over its inventory in a year)
Implied dividend yield = correct answers (4 x most recent quarterly dividend) / current stock
price
Is a broker dealer involved in a securities offering allowed to tell a potential investor that he can
purchase the security "at the market?" correct answers An SEC rule prohibits broker-dealers
involved in securities offerings from stating that securities are offered at the market, unless such
a market exists and has not been made solely by the broker-dealer or the syndicate. If shares are
bought on a principal basis through ABC or any other underwriter, the transaction is not at the
,market. Shares allocated at the public offering price also are not at the market, because the
market doesn't set this price.
When do sell-side advisors begin due diligence on potential buyers? correct answers Prior to
process launch
For a US Treasury security, which is greater - bond equivalent yield or discount bond yield
correct answers bond equivalent yield
Where can an investor find compensation details about the compensation of a public company's
executive officers and directors? correct answers proxy statement
When must an investor in an IPO receive a preliminary prospectus correct answers at least 48
hours before an order is consummated - An indication of interest is not binding on the investor,
in part because investors may not yet have the facts they need to make a final decision. Investors
who place indications must be given a preliminary prospectus (red-herring) at least 48 hours
prior to confirming the sale of securities.
Can a private company meet with analysts 15 days before filing their security registration in
order to update the analysts on their offering? correct answers No this is considered gun jumping
-- During the 30-day period prior to an issuer's filing a registration statement, some
communications by issuers are allowed, but they may not mention a securities offering connected
to the registration. This is considered a gun-jumping violation. Note that the registration and
prospectus have not yet been filed, so this type of communication cannot be corrected by filing a
free-writing prospectus.
Can an issuer of a DPP list miscellaneous expenses of $150k as bona fide issuer expenses?
correct answers NO, FINRA requires that all bona fide issuer expenses fall into clearly defined
categories and miscellaneous unclassified expenses are not allowed as such. They will be
considered an underwriting expense
In a corporate underwriting spread, what % do the manager's fee, underwriting fee, and selling
concession constitute? correct answers managers fee 20%
underwriting fee 20%
selling concession 60%
A company that is a target of a tender offer must file which schedule to announce its response to
the offer correct answers Schedule 14D-9
What does an automatic stay mean correct answers Once a bankruptcy case is commenced,
creditor are not permitted to enforce their remedies. However creditors can file a motion with the
courts to seek relief from the automatic stay
If a director or an officer of a public company does not meet the income and asset tests for
accredited investors, is he still considered an accredited investor as it relates to his public
, company correct answers yes, officers and directors of the issuer are always accredited investors,
regardless of their income and net worth
In an M&A sale, in what circumstance would the seller conduct thorough due diligence on the
buyer correct answers Stock is a large part of the purchase consideration; when target
shareholders will be receiving a large portion of the acquirer's stock as consideration, they will
expect to conduct detailed due diligence on the buyer
Which research division must have an information barrier separating it from the trading desk
correct answers the debt research must be separated from the trading desk but equity research
does not need to be separated
In which case can a registered rep participate in an IPO through a brokerage account in which he
owns 100% of the beneficial interest correct answers to avoid dilution of existing holdings;
FINRA generally does not allow allocating IPO shares to accounts in which restricted persons
have more than a de minimis 10% beneficial interest. However, an exception is allowed when a
broker-dealer or registered rep is already an investor in the IPO company prior to the IPO and
wants to avoid getting diluted.
What are some examples of events that trigger a registrant's obligation to file a Form 8-K correct
answers completion of acquisition or disposition of assets, costs associated with exit or disposal
activities, material impairments, creation of a direct financial obligation of a registrant
Who is the Debtor in Possession in a Ch 11 filing correct answers the insolvent firm; the DIP
must pay all debts incurred after filing the petition and avoids debts incurred before the filing
What two components are usually included in a term sheet for a preferred stock private
placement correct answers cash dividend and warrants
At what point during an auction is the Final Bid Procedures Letter typically distributed to bidders
correct answers during the second round after significant due diligence has been performed
Who can enter a stabilization bid and how long can it last correct answers The syndicate manager
enters the stabilization bid and these bids can last indefinitely
For whom does a fairness opinion provide a legal defense against claims that mergers and
acquisitions were not negotiated at arm's-length, to arrive at fair terms and prices? correct
answers Board of directors
An OTC issue has an average daily trading volume of 10,000 shares. During a restricted period,
a passive market maker may not exceed what level of net purchases per day? correct answers
30,000; During the restricted period, a passive market maker's per day limit on net purchases is
the greater of 30% of average daily trading volume or 200 shares.
Who can purchase a Regulation S offering? Is there a size cap? Is there a holding period? correct
answers Reg S offerings must occur overseas by a resident of a foreign country (citizenry is not a
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