Which One of the Following Is Correct About Security Offerings

question 218

Multiple Choice

Which one of the following is correct about security offerings?

• A) One of the costs of an IPO is the abnormal return.
• B) The underwriting spread tends to be a constant percentage regardless of the offering size.
• C) The costs of selling equity are less than the costs of selling debt.
• D) The Green Shoe option covers overallotments at the market price.
• E) There are economies of scale in both equity and bond offerings.

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Definitions:

Suppliers

Entities that provide goods or services to another company or individual, often as part of a supply chain or market.

Laptops

Portable personal computers with a clamshell form factor, suitable for mobile use and equipped with a screen and alphanumeric keyboard.

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded, often considered the market-clearing price.

Equilibrium Quantity

The quantity of goods supplied is equal to the quantity demanded at the market equilibrium price.