Question

1. Which one of the following is the first step in an IPO?

   	I.	preparing the prospectus
   	II.	hiring an underwriter
   	III.	filing a registration statement with the SEC
   	IV.	obtaining the approval of the board of directors

1. Cass purchased 100 shares of Polar Tek stock on Monday, September 3. Polar Tek paid its quarterly dividend of $.80 a share on Friday, September 28. The record date was Wednesday, September 5. How much did Cass receive as a dividend payment on September 28?

   	I.	$80.00
   	II.	$8.00
   	III.	$.80
   	IV.	$0.00

Answer 1

Question 1) The Correct option is B

The first step in the process is hiring a underwriter, An Underwriter is the investment banks who provides the advice on the company initial public offer and then the next process in the IPO is Due Dilligence and Fillings with the regulatory authorities which includes engagement letter, letter of intent, red herring prospectus and registration document with the Securities and Exchange Commission.

Question 2) Cass Purchased the share on 03/Sep

The record date of quarterly dividends - 05/Sep

Cass Has purchased the shares before the record date which is the cut off date for the dividends payments, Therefore, he will be entitled for the dividends.

Per Share dividends - $0.80

Shares Cass has - 100 shares

Dividend Received = Number of Shares * Per Share Dividend

= 0.80*100

= $8.00

The Dividends that is received by Cass is $8.00.