If the Market Price of Existing Publicly Traded Shares Declines

question 11

Multiple Choice

If the market price of existing publicly traded shares declines due to the announcement of a seasoned issue of stock, the decline is referred to as which one of the following?

• A)Spread
• B)Direct underwriting cost
• C)Underpricing
• D)Direct issue cost
• E)Abnormal return

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Definitions:

Attitude-Behavior Relationship

The connection between an individual's beliefs or feelings towards an object, person, or situation, and how they subsequently behave.

Attitudes Develop

The process by which individuals form opinions and dispositions towards various phenomena based on experiences, information, and social influences.

Postdecisional Dissonance

The psychological conflict or discomfort experienced after making a difficult decision, often leading to regret or rationalization of the choice.

Balance Theory

A psychological theory suggesting that people prefer harmony and consistency in their views, beliefs, and sentiments, and will change or modify them to achieve balance.