Question 1: The largest cost in a public stock offering is:

• printing expenses.
• filing fees with the SEC.
• the underwriter's commission.
• legal fees.

Question 2: The "wait to go effective" is the time period when:

• the SEC registration statement is being prepared.
• the underwriter decides what regulation to file under.
• the firm prices the stock for the offering.
• the company is waiting for SEC approval after filing the registration statement.

Question 3: ________ financing includes the personal investment of the owners and is often called "risk capital."

• Equity
• Asset-based
• Debt
• Growth

Question 4: The outstanding publicly held stock is also called:

• the public float.
• equity stock.
• preferred stock.
• available float.

Question 5: Working capital can be calculated by:

• Current Asset - Current Liabilities.
• Total Asset - Current Liabilities.
• Total Liabilities - Total Asset.
• Total Asset - Total Liabilities.

Question 6: The formal underwriting agreement is signed:

• on the last day before the registration statement becomes effective.
• when the statement of registration is filed.
• during the road show.
• at the time of the letter of intent.

Question 7: A foreign stock market that caters to small companies is:

• AIM.
• AMX.
• the NASDAQ.
• DPOX.

Question 8: The single most important ingredient in making a successful public offering is:

• choosing a capable underwriter.
• negotiating a favorable letter of intent.
• preparing a suitable registration statement.
• filing Regulation D with the SEC.

Question 9: ________ is any form of wealth used to produce more wealth.

• Debt
• Equity
• Capital
• Capacity

Question 10: In a public offering, the underwriter:

• advises the owner as to the best structure of the business going into the sale.
• serves as an adviser and consultant to the small business in preparing the registration statement for the SEC.
• is bound to the offering until it is executed.
• is listed as one of the officers of the company.

Question 11: The two factors that make a deal attractive to venture capitalists are:

• effective marketing strategies and networking opportunities.
• high returns and a convenient (and profitable) exit strategy.
• high returns and networking opportunities.
• a convenient and (profitable) exit strategy and effective marketing strategies.

Question 12: Regulation A is best suited when a company is at the ________ stage.

• startup
• early
• expansion
• later

Question 13: When filing with the SEC, the initial registration statement:

• prohibits a "road show."
• is filed without share price, proceeds, or commissions listed.
• signals the time to sign the formal underwriting agreement.
• is generally accepted without corrections by the SEC.

Question 14: It typically takes ________ to take a company public.

• 30 days
• one year
• 60 to 180 days
• two weeks

Question 15: ________ governs private placements and is designed to reduce the registration requirements for small companies going public.

• Regulation D
• Form SB
• Form S-1
• Regulation A