True and false questions based on initial public offering


Question1: Owners of CIT will become creditors and creditors will become owners due to the bankruptcy filing by CIT.

[A]    True

[B]    False

Question2: Upon emergence from bankruptcy, CIT will issue new common shares to existing debt holders in accordance with the prepackaged plan of reorganization. Those shares will be freely tradable. The existing ordinary shares will cease trading and will be cancelled.

[A]    True

[B]    False

Question3: An initial public offering is:

[A]    The first issue of equity shares to the general public.

[B]    An offering of newly issued debt or equity shares to the general public.

[C]    Another name for a rights offering.

[D]    The initial financing provided to a firm outside of that provided by the firm's founders.

[E]    An offering of any newly issued equity shares to the general public.

Question4: The proceeds of the A123 IPO were used to repay bank loans & buy back outstanding debt.

[A]    True

[B]    False

Question5:Because of its bankruptcy filing; CIT will have no more access to bank lines of credit.

[A]    True

[B]    False

Question6: CIT will have to stop offering financing to its customers until it emerges from bankruptcy.

[A]    True

[B]    False

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Finance Basics: True and false questions based on initial public offering
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