A New Public Equity Issue from a Company with Public

question 8

Multiple Choice

A new public equity issue from a company with public equity previously outstanding is called:

• A) An initial public offering (IPO)
• B) American depositing receipts (ADRs)
• C) A seasoned equity offering (SEO)
• D) A private placement

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Definitions:

Incremental Value

The additional value created by undertaking a particular action or project, calculated by comparing the difference in an entity's value with and without the action.

Equity Firms

Equity firms, often referred to as private equity firms, are investment companies that acquire, manage, and sell stakes in companies, using their funds or raised capital.

Net Present Value

A method to evaluate investments by calculating the difference between the present value of cash inflows and outflows over a period.

Synergy Value

The additional value created from combining two or more entities, where the whole is greater than the sum of its parts.