On 19 August 2004, Google IPO Offered 19,605,052 Shares at a Price

question 40

Multiple Choice

On 19 August 2004, Google IPO offered 19,605,052 shares at a price of U.S. $85 per share, which were sold in an online auction in a bid to make the shares more widely available. Which of the following statements best describes why these are considered a primary market transaction?

• A) The transaction was between the corporation and investors.
• B) The shares were the first to be publicly issued by Google.
• C) Google was at the time a recently founded company seeking capital with which to expand.
• D) Shares of Google from this time onward could be traded between investors on a stock exchange.

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Definitions:

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest obligations, calculated as earnings before interest and taxes divided by interest expense.

Debt-to-Assets Ratio

Debt-to-Assets Ratio is a financial ratio indicating the proportion of a company's assets that are financed through debt, used as a measure of financial leverage.

Quick-Ratio

A measure of a company's ability to meet its short-term obligations with its most liquid assets, calculated as (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities.

Common Size Income Statements

A financial statement in which all line items are expressed as a percentage of revenue, allowing for easy comparison across companies and time periods.