Question

In: Finance

1- Which of the following statements is false ? a) Tombstones are ads giving details about...

1- Which of the following statements is false ?

a) Tombstones are ads giving details about the company's IPO.

b) Red herring is the first prospectus submitted to the SEC.

c) Tombstones represent prospectus filled by the company during the waiting period.

d) Red herring represent ads informing the public about the company's IPO.

2- The venture capital is preferred to an IPO. This holds especially for

a) Well-established companies

b) Growing companies

c) Start-up companies

d) All companies, without exceptions

Expert Solution

Question 1: Statement 3 and 4 is false

Tombstones are the advertisemnts that the company has to publish when the company is bringing initial public offers and red herring prospectus goes into greater details of the initial public offer details and it contains all the informations relating to offer like company financials, and the operations of the company.

Red herring prsospectus is a first prospectus that must be submitted to the securities and exchange commission in order to further process the offer.

Therefore, Tombstone represent the adverstisements related to the offer and red herring prsopectus is the prospectus which gives all the details about the company to the investors.

Question 2: Start up companies

Venture capital refer to the group of private equity who invests in the start-up companies that has huge potential to grow in the future, Though it contains high risk of capital, but it offers greater returns than any other companies.

These are the group of investment banks and well-off investors who has wide exposure to the markets.

jeff jeffy answered 2 years ago

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