To Be Eligible to Use Rule 415,a Firm Must

question 53

Multiple Choice

To be eligible to use Rule 415,a firm must

• A)not have defaulted on its debt anytime in the past 5 years.
• B)guarantee the new shares will be sold evenly over a period of 3 years.
• C)have a market value of common stock in excess of $250 million.
• D)never have violated any of the provisions of the Securities Act of 1934.
• E)have an investment-grade rating.

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Definitions:

Outstanding Balance

The outstanding balance is the amount of debt, or loan, that remains to be paid off.

Cash Flows

A reiteration emphasizing on multiple streams or instances of money being transferred into and out of a business or investment.

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Trial-And-Error

A method of problem-solving that involves testing various methods of achieving an outcome until a satisfactory solution is found.