Question 4 2 pts The part of the underwriting contract that specifies how long insiders must wait after an IPO before they can sell stock is called a The contract provision that gives the underwriter the option to purchase additional shares from the issuer at the offering price is called a Which of the following best describes your answers? Firm commitment clause: Under allotment option. IPO clause: Syndicate clause. O Lockup agreement: Green Shoe provision. Aftermarket provision: Before market provision. Question 6 2 pts Why are you most concerned about determining the correct offering price of the IPO for your company? If the issue is priced too high, it may be unsuccessful and have to be withdrawn. The underwriter will only make money if the offering price is above the average of all market prices offered on the initial day of offering. If the issue is priced below the true market value, the issuer's existing shareholders will experience an opportunity loss when they sell their shares for less than they are worth. All of the above. Only a. and c. above. Question 7 2 pts You consider which of the following? There are substantial economies of scale regarding the costs of issuing debt and equity because the underwriter spreads are smaller on larger issues. The costs associated with selling debt are substantially less than the costs of selling equity. O Shelf registration allows a company to register all issues it expects to sell within two years at one time, with subsequent sales at any time within those two years. O All of the above. Only a. and c. above