The Preliminary Prospectus ("Red Herring")does Not Include the Offer Price

question 5

True/False

The preliminary prospectus ("red herring")does not include the offer price of a new stock issue.

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Definitions:

Marginal Social Benefit

The additional gain to society as a whole from consuming or producing one more unit of a good or service.

Marginal Social Cost

The additional cost imposed on society as a whole by producing one extra unit of a good or service.

Nonrival

A good or service that can be consumed by one individual without preventing the consumption of the good by another individual.

Nonexcludable

A characteristic of a public good, indicating that it is not feasible to prevent non-paying customers from consuming the good.