4. Stock issues (S14.1–S14.4) True or false?

a. Venture capitalists typically provide first-stage financing sufficient to cover all development expenses. Second-stage financing is provided by stock issued in an IPO.

b. Underpricing in an IPO is only a problem when the original investors are selling part of their holdings.

c. Stock price generally falls when the company announces a new issue of shares. This is attributable to the information released by the decision to issue.

d. The rights issue will give the shareholder the opportunity to buy one new share for less than the market price.