FIN 320F Unit 14

Financing by wealthy individuals or private investment groups is referred to as________.

-venture capital -private equity

New York Stock Exchange Designated Market Makers (DMMs) were formerly called__________.

specialists

A firm's registration statement to issue securities will typically include all of the following except:

the proposed price for the security

An advertisement published in financial newspapers such as the Wall Street Journal used during and after the registration waiting period is called a:

tombstone

Entrepreneurs seeking start-up capital must usually rely on ________.

venture capital

The efficient market hypothesis contends that __________ capital markets such as the NYSE are efficient.

well-organized

Whether a firm obtains capital by debt or equity financing depends on:

-the size of the firm -the firm's life-cycle stage -the firm's growth prospects

In return for early stage financing, venture capitalists will frequently receive which of the following?

- convertible preferred stock - ability to name some management -seats on the board

Which of the following are important considerations when choosing between venture capitalists?

- financial strength - style - exit strategy

Which of the following are true about the venture capital (VC) market? Select all that apply.

-Personal contacts are important in gaining access to the VC market -Access to venture capital is very limited

Private equity firms provide financing for firms that otherwise would have difficulty raising capital such as:

-distressed firms -start-up firms -closely held private firms

"Inside Quotes" represent the ___________ and the _____________.

highest bid price; lowest ask price

An efficient An efficient market is one in which any change in available information will be reflected in the company's stock price ____

immediately

Stock prices fluctuate from day to day because of:

information flow

Stock price reporting has increasingly moved from traditional print media to the _________ in recent years.

internet

A red herring is another name for a:

preliminary prospectus

The trading of existing shares occurs in the _______ market.

secondary

If a study of a firm's financial information will not lead to gains in the market, then the market must be at least _________ efficient.

semi-strong form

Place the steps involved in issuing securities to the public in chronological order.

1. obtain approval from the firm's board of directors 2. prepare and file a registraiton statement 3. prepare and distribute preliminary prospectus copies 4. determine a selling price 5. prepare and distribute a final prospectus

The two most important stock markets in the U.S. are the New York Stock Exchange and _______

NASDAQ

Which type of stock price adjustment time path occurs when there is a bubble (price run up) in the path followed by a decline after the market receives information about the stock?

Overreaction and correctio

Which act sets forth the federal regulation for all new interstate securities issues?

The Securities Act of 1933

Which of the following defines the primary market?

The primary market is where stocks are issued for the first time

A person who brings buyers and sellers together is called a(n)___________.

broker