Which of the Following Statements Is False

question 20

Multiple Choice

Which of the following statements is false?

• A) The one advantage of a cash offer is that the underwriter takes on a larger role and, therefore, can credibly certify the issue's quality.
• B) SEO underwriting fees average about 5% of the proceeds of the issue and, as with IPOs, the variation across issues of different sizes is relatively small.
• C) As with IPOs, evidence suggests that companies over-perform following a seasoned offering.
• D) Often the value destroyed by the price decline can be a significant fraction of the new money raised with a SEO.

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Definitions:

Bearer

An individual in possession of an instrument, such as a check or bond, that is not made out to a specific payee.

Certified Cheque

A cheque guaranteed by a bank, indicating that the funds are available and have been set aside for the payee.

Bill Drawn

A document requesting the payment of money, typically used in international trade, specifying the amount and terms of payment.

Drawee

is the party, often a bank, required to pay the monetary amount specified in a check or draft.