Basic Finance W8b (MIT)

Bavarian Brewhouse is planning on going public. Under the underwriting agreement, the underwriting discount is 7.25%. If the offering price of the share is set at $11.80 per share, what is the per share proceeds that Bavarian will receive?

A bank that helps companies to acquire external capital is called:

• a. a commercial bank

• b. a savings bank

• c. an investment bank

• d. a credit union

A security offering that raises capital for companies is called:

• a. a primary offering

• b. a secondary offering

• c. a securitisation

• d. a privatisation

Which of the following is not considered an advantage of going public?

• a. New capital for the company

• b. Listed share for use as compensation

• c. Share price emphasis

• d. Personal wealth and liquidity

A bond sold by foreign corporations to US investors is called:

• a. a Eurobond

• b. a foreign bond

• c. a Yankee bond

• d. a Kangaroo bond