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1. For each stage of financing write the letter for the best match with the stage of business development. One match for each

Bootstrap financing ___ A. Product and market validation; significant revenues

Seed Round ___ B. product in beta test; some customer validation

Series A or B round ___ C. Business idea; some initial product development

Institutional growth capital ___ D. Some progress with product, maybe alpha testing

2. All of the following are advantages of an IPO except:
   1. Can raise significant amounts of capital
   2. Can provide liquidity for existing shareholders
   3. Can provide a liquid stock as currency for future acquisitions
   4. Company must publicly disclose much of its formerly confidential information
3. A company prices its IPO of 120 million shares through an underwritten offering at a price to the public of $20 per share. 100 million shares are being sold by the company and 20 million shares are being sold by selling shareholders. The underwriting discount is 5%. The underwriters are granted an over-allotment option covering 15% of the shares sold. The shares immediately trade up to $25 per share in the first day of trading. Answer the following questions:

The price per share to the public is: _____

The price per share paid by the underwriters is: _____

The total proceeds to the company (before option) is: _____

The total proceeds to the selling shareholders is: _____

If the shares remain above $25 per share, is it likely that the

underwriters will exercise the over-allotment option? (yes or no) _____

15) For each stage of financing write the letter for the best match with the stage of business development. One match for each Bootstrap financing A. Product and market validation; significant revenues Seed Round B. product in beta test; some customer validation Series A or B round C. Business idea; some initial product development Institutional growth capital D. Some progress with product, maybe alpha testing 16) All of the following are advantages of an IPO except: A. Can raise significant amounts of capital B. Can provide liquidity for existing shareholders C. Can provide a liquid stock as currency for future acquisitions D. Company must publicly disclose much of its formerly confidential information 17) A company prices its IPO of 120 million shares through an underwritten offering at a price to the public of $20 per share. 100 million shares are being sold by the company and 20 million shares are being sold by selling shareholders. The underwriting discount is 5%. The underwriters are granted an over-allotment option covering 15% of the shares sold. The shares immediately trade up to $25 per share in the first day of trading. Answer the following questions: The price per share to the public is: The price per share paid by the underwriters is: The total proceeds to the company (before option) is: The total proceeds to the selling shareholders is: If the shares remain above $25 per share, is it likely that the underwriters will exercise the over-allotment option? (yes or no)

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