Which of the Following Statements About Secondary Offerings Is False

question 44

Multiple Choice

Which of the following statements about secondary offerings is false?

• A)Secondary offerings may occur when holders of large blocks of stock wish to sell too many shares for normal channels to handle.
• B)Secondary offerings occur after an IPO.
• C)Secondary offerings occur when an investment banker underwrites the sale of stock for existing stockholders, rather than for the company.
• D)There is a trend away from the use of secondary offerings.

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Definitions:

Price

The amount of money required to purchase a good, service, or asset.

AVC

Average Variable Cost represents the variable costs (like materials and labor) associated with producing each unit of output.

ATC

Average Total Cost, the total cost of production divided by the quantity of output produced, encompassing both fixed and variable costs.

MC

Short for Marginal Cost, it refers to the change in total cost that arises when the quantity produced is incremented by one unit.