Reference no: EM132873165
Question 1: In issuing stock, the term "spread" refers to
A. the profit the managing investment banker gets for an issue of stock.
B. the disparity between the initial asking price and the average price for the stock issued some months later.
C. the difference between what the corporation gets for new issues of stock and what the public pays for the stock.
D. the total cost to the corporation for issuing new stock.
Question 2: In a public distribution, the dealer group will generally pay a
A. higher price for the stock than the public.
B. lower price for the stock than the managing investment banker.
C. higher price for the stock than the managing investment banker.
D. lower price for the stock than members of the investment banking syndicate group.
Question 3: Generally, the total cost to issue securities (as a percent of total proceeds)
A. is greater for common stock than for debt and increases as the size of the issue increases.
B. is greater for debt than for common stock and decreases as the size of the issue increases.
C. is greater for debt than for common stock and increases as the size of the issue increases.
D. is greater for common stock than for debt and decreases as the size of the issue increases.