Series 79 practice questioneasyTypes of Offerings
What distinguishes an IPO from a follow-on offering?
- AAn IPO always uses debt instead of equity
- BAn IPO is the first registered public sale of a company’s shares✓ Correct answer
- CA follow-on offering can only be sold to insiders
- DOnly follow-ons require SEC review
Explanation
Why B — An IPO is the first registered public sale of a company’s shares
An IPO is the first registered public sale of a company’s shares In an IPO, a private company becomes publicly traded through its first registered sale of securities to the public. A follow-on occurs after the issuer is already public.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 477+ Series 79 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Underwriting & New Financing questions
- In a secondary offering, who receives the proceeds when existing shareholders sell stock?
- Which type of offering gives existing shareholders transferable rights to buy additional shares, usually at a…
- Which offering structure is most likely to be used by a public company that wants flexibility to issue securities over…
- During the book-building process for an IPO, what types of orders do institutional investors typically submit?