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← Series 79: Underwriting & New Financing
Series 79 practice questionmediumIPO Process

Assuming the share count is unchanged and the effective registration-fee table used the $21 high end, how may a $25 final price be reflected?

  1. AIn the Rule 424(b) final prospectus because the 19.05% deviation from $21 is within Rule 430A's 20% aggregate limit✓ Correct answer
  2. BA new registration statement must be filed and a new cooling-off period must begin
  3. CAn amended registration statement must be filed reflecting the new price range, and investors must be given the opportunity to reconfirm their orders
  4. DThe underwriters must reduce the offering size to maintain the original price range
Explanation

Why A — In the Rule 424(b) final prospectus because the 19.05% deviation from $21 is within Rule 430A's 20% aggregate limit

$25 is 19.05% above $21. Rule 430A permits a deviation within 20% of the maximum aggregate offering price to be reflected in the Rule 424(b) prospectus, assuming no other material change.

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