The Vast Majority of Initial Public Offerings Have Underwriting Spreads

question 30

Multiple Choice

The vast majority of initial public offerings have underwriting spreads that cost the firm what percentage of the net capital raised?

• A) 0.5%
• B) 7.0%
• C) 7.5%
• D) 8.0%

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Definitions:

Deregulation

The removal of most or even all of the government regulation and laws designed to supervise an industry. Sometimes undertaken to combat regulatory capture.

Industrial Regulation

Government policies aimed at regulating the operations of industries to prevent unfair practices and ensure competition.

Net Benefits

The total benefits of some activity or policy less the total costs of that activity or policy.

Price-Fixing

An agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold, preventing market competition.