The gross spread in a new issue depends upon which of the following?
Answer(s): D
all of the above. The gross spread (or “underwriting spread”) depends upon all of these factors.
Bubba Corporation has a registered public offering of 500,000 shares at $36. Of these, 300,000 shares were authorized by unissued and 200,000 shares were sold on behalf of an affiliated person.What is evident from this information?
both B and C. The 200,000 shares are sold on behalf of the affiliated person so the proceeds go to that individual. Only the other 300,000 shares are a primary offering.
Which of the following is not provided for by Blue Sky laws?
Answer(s): C
interstate mail fraud in securities offerings. Blue Sky laws are state security laws and do not cover interstate regulations.
An excerpt from a recent tombstone ad reveals bonds offered publicly at 101. Why were they priced at a premium?
Answer(s): B
to reflect prevailing credit ratings and market conditions for the issuer. Premiums or discounts are used in bond offerings to bring the yield in line with current market conditions.
Securities may be sold under SEC rule 144 provided that the following conditions are met:
Answer(s): A
the company files regular financial data with the SEC. Rule 144 transactions may use either agency or principal methods.
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