6. Which of the following statements about Initial Public Offerings are TRUE or

FALSE?

True

False

Statement

IPOs are less risky than a typical stock market investment (i.e. investing in McDonald's or Coca-Cola) since they are typically smaller companies

An IPO occurs when a private company sells stock to the public for the first time

When an IPO occurs, a company raises money from public investors that they use to grow their business

IPOs are risky investments since the company going public often has a limited track record of performance

One benefit of "going public (another term for an IPO)" is that a public company has less regulations to follow than a private one

7. Which of the following statements about dividends are TRUE or FALSE?

True

False

Statement

Dividends are earned when you sell your shares for a higher price than when you bought them

Dividends are typically set between $20 and $30 per share

Dividends give stockholders a steady return, regardless of what happens to the stock price.

Dividends cannot legally be reinvested in the same company where they were earned

Dividends are usually paid quarterly by well established publicly traded companies