True and false questions on initial public offering

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Reference no: EM1311057

True and false questions on initial public offering and other forms of capital.

1. An initial public offering is:

a) The initial financing provided to a firm outside of that provided by the firm's founders.

b) An offering of any newly issued equity shares to the general public.

c) The first issue of equity shares to the general public.

d) An offering of newly issued debt or equity shares to the general public.

e) Another name for a rights offering.

2. Owners of CIT will become creditors and creditors will become owners due to the bankruptcy filing by CIT.

a) True

b) False

3. CIT will have to stop offering financing to its customers until it emerges from bankruptcy.

a) True

b) False

4. Because of its bankruptcy filing; CIT will have no more access to bank lines of credit.

a) True

b) False

5. Upon emergence from bankruptcy, CIT will issue new common shares to existing debt holders in accordance with the prepackaged plan of reorganization. Those shares will be freely tradable. The existing common shares will cease trading and will be cancelled.

a) True

b) False

6. The proceeds of the A123 IPO were used to repay bank loans and buy back outstanding debt.

a) True

b) False

Reference no: EM1311057

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