A ________ Requires That the Original Owners of the Firm

question 64

Multiple Choice

A ________ requires that the original owners of the firm maintain ownership of their stock for at least 180 days following an IPO.

• A)green-shoe provision
• B)lock-up agreement
• C)letter of commitment
• D)red herring

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle.

Payables Financing

A form of short-term borrowing where a company finances its accounts payables through a third party.

Prompt Payment Discount

A discount offered to buyers for paying their invoices early, encouraging faster payments.

Pledged

Assets or collateral that a borrower offers to a lender to secure a loan, which the lender may seize if the loan is not repaid.