Arguments to Explain Why Most Equity Issues Are Underwritten Versus

question 27

Multiple Choice

Arguments to explain why most equity issues are underwritten versus sold through a rights offering are:

• A) underwriters buy at an agreed upon price and bear some risk of selling the issue.
• B) cash proceeds are available sooner in underwriting and the issue is available to a wider market.
• C) investment bankers can provide market advice and certify the issue for potential investors.
• D) All of these.
• E) None of these.

---

Definitions:

R&D

Research and Development, referring to activities in connection with corporate or governmental innovation.

Interest-rate Cost

The expense incurred from borrowing money, typically expressed as a percentage of the principal amount.

Scientific Character

The nature or behavior of something that is based on or in accordance with the principles of science.

Technological Opportunities

The possibilities for technological innovation and development, often leading to new products, services, or processes.