1. Which of the following is not an advantage of SPAC IPOs over the traditional IPOs?

A) IPO underpricing is not an issue for SPAC IPOs

B) SPAC IPOs can provide capital inflows quicker

C) Marketing costs are lower for SPAC IPOs

D) SPAC IPOs often require a more rigorous due diligence process

2. In a spin-off,

A) shares of the new company are bought by borrowing or issuing junk bonds.

B) a private equity firm sells the assets of a portion of an acquired company.

C)shares of the new company are sold as a public offering.

D) shares of the new company are given to shareholders of the parent company.

3. Which of the following statements regarding best efforts IPOs is FALSE?

A) For smaller IPOs, the underwriter commonly accepts the deal on this basis.

B) The underwriter does not guarantee that the stock will be sold, but instead tries to sell the stock for the best possible price.

C) Often these arrangements have an all-or-none clause: either all of the shares are sold in the IPO, or the deal is called off.

D) If the entire issue does not sell out, the underwriter is on the hook for the unsold shares.

4. A part of the registration statement, called the preliminary prospectus, circulates to investors before the stock is offered. This preliminary prospectus is also called a(n):

A) 10-K filing.

B) red herring.

C) IPO filing.

D) blue whale.

5) In carve-out transactions,

A) shares of the new company are bought by borrowing or issuing junk bonds.

B) None of these options are correct.

C) shares of the new company are given to the shareholders of the parent company.

D) shares of the new company are sold in a public offering.

6) According to academic studies on on corporate actions which of the following corporate announcements does not result in positive abnormal returns?

A) Seasoned equity offerings

B) Share repurchases

C) Equity carve-outs

D) Spin-offs

7) Which of the following statements regarding spin-offs and carve-outs is not true?

A) Spin-offs are not taxed if the shareholders of the parent company are given at least 80 percent of the shares in the new company.

B) In carve-outs, the parent company retains majority control.

C) Spin-offs are not taxed if the shareholders of the parent company are given a majority of shares in the new company.

D) Capital gains or losses (if any) from carve-outs are taxed at the corporate tax rate.

8) In an effort to increase shareholder value, equity carve-outs are usually followed by:

A) IPOs

B) Seasoned equity offerings

C) Spin-offs

D)Cash dividend payments