Question

1.When a private equity (PE) sells a firm that it previously took private to another PE firm, this is an example of a(n):

A. Initial public offering

B. Sale to an Financial buyer

C. Sale to a strategic buyer

D. Non of the following

2. In an IPO, if your company wants to have more certainty about getting a certain amount of proceeds from the stock issuance, which method would you likely to choose

A. Auction

B. Firm commitment

C. Best efforts

D. None of the above

3. Which of the following is NOT an advantage of preferred stock

A. Tax deductibility of dividend to the issuing corporation

B. More financial flexibility than debt

C. Less dilution than common equity

D. All of the above

Answer 1

1.

When a private equity (PE) sells a firm that it previously took private to another PE firm, this is an example of Sale to an Financial buyer.

Option (B) is correct answer.

2.

In an IPO, if your company wants to have more certainty about getting a certain amount of proceeds from the stock issuance then comapny would likely to choose Firm commitment method.

Option (B) is correct answer.

3.

preferred stock does not provide tax deductibility of dividend to the issuing corporation and has less financial flexibility than debt and more dilution than common equity.

So,all of the option are correct answer.