Which of the Following Statements Is FALSE

question 46

Multiple Choice

Which of the following statements is FALSE?

• A) Once the issue price (or offer price) is set, underwriters may invoke another mechanism that allows them to sell extra shares of more successful offerings-the over-allotment allocation.
• B) Before the offer price is set, the underwriters work closely with the company to come up with a price range that they believe provides a reasonable valuation for the firm.
• C) Before an IPO, the company prepares the final registration statement and final prospectus containing all the details of the IPO, including the number of shares offered and the offer price.
• D) In a cash offer, a firm offers the new shares only to existing shareholders.

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Definitions:

Monetarists

Economists who believe that variations in the money supply have major influences on national output in the short run and the price level over longer periods, as well as on inflation.

Money Supply

The overall quantity of currency and other liquid instruments circulating in an economy at a particular time.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Supply-Side Economics

An economic theory that advocates for lower taxes and deregulation to stimulate production and economic growth.