17. Which of the following statements are true? I. Underwriters help private com

Question

17. Which of the following statements are true? I. Underwriters help private companies access public stock markets through IPOs Il. Shelf registrations and private placements are examples of seasoned security issues. Ill. Issue costs for debt are typically greater than issue costs for equity. IV. Bearer bonds make it easier for investors to avoid paying taxes on interest income. A. I and ll only B. I and Ill only C.I, Il, and IV only D. I, II, and IV only E. I, II, IlI, and IV F. None of the above.

Explanation / Answer

I. Correct,Underwriters work for Investment banks who manage the entire IPO process of private firms when they get listed on Stocks, right from valuation till arranging stock holders.

2. Correct, Self Registration and private placement are example of seasonsed security issues.Shelf registration, also known as shelf offering, is a type of public offering in which a company can use a single prospectus to issue seasoned securities to the public multiple times over a period of many years. The company does not have to have a separate prospectus for each offering.

3. Incorrect, Generally Equity is most costly than the debt.

4. Correct,Bearer bond's primary appeal is that they enable investors to avoid payment of taxes on interest.

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