Underwriter Is a Specialized Type of Bank That Buys the Shares

question 65

True/False

Underwriter is a specialized type of bank that buys the shares from the company preparing an IPO and sells them to investors.

---

Definitions:

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, typically with dividends that are paid out before dividends to common shareholders.

No-par Common Stock

No-par common stock is issued without a par value, and its value is determined by what investors are willing to pay for it, rather than being stated in the company's charter.

Cash Dividend

A payout to shareholders from a company's earnings in the form of cash.

Dividends in Arrears

This term refers to dividends on preferred shares that have been declared but not yet paid to shareholders.