options for #1 = sold on a best efforts basis / underwritten

options for #2 = syndicated / unsyndicated

If the investment bank guarantees the sale of the securities, the issue is . If more than one investment bank is involved in the IPO, the deal is referred to as stock offering. After the preliminary prospectus is approved for the IPO, the biggest responsibility for the issuing company and the investment bank becomes ensuring that the determined number of securities is sold and the firm is able to raise the intended amount. The IPO team-including the investment bankers, senior management team, lawyers, and investor relations team-conducts various activities. Which of the following statements are true about the activities involved in the IPO process? Check all that apply. Issuing firms allow underpricing of their IPO mostly because the company wants to create excitement and have a successful IPO, which would help the company in future offerings. During the roadshow, the IPO team can divulge additional information to institutional investors that is not given in the preliminary prospectus to lure the institutional investors. The investment banker estimates the potential demand for the securities by recording the number of shares that each investor is willing to buy. This is called book building. The IPO team goes on a roadshow, making presentations to institutional investors selected by the underwriter. Suppose ReapingTheBenefits Co. (RTB Co.) is one of the largest investment banking firms on Bay Street. VisionStone Corp. hired RTB Co. as the underwriter for its IPO. RTB Co. has set the offering price of the share to $20 per share. The underwriters will charge a 5.0% spread. How many shares must the company sell to net $75 million, ignoring any other expenses? 5.53 million shares 3.95 million shares 4.74 million shares 3.75 million shares