Series 79 practice questionmediumIPO Process
What is the typical sequence of events on the pricing date of an IPO?
- AShares begin trading, then the price is set, then the underwriting agreement is signed
- BThe underwriting agreement is signed, the final price is determined, and the registration statement is declared effective
- CThe SEC declares the registration statement effective, the final price is determined, and the underwriting agreement is executed✓ Correct answer
- DThe SEC declares the registration effective, then the roadshow begins, then the price is set
Explanation
Why C — The SEC declares the registration statement effective, the final price is determined, and the underwriting agreement is executed
For a typical IPO, effectiveness is obtained before the securities are priced and sold; pricing and execution of the underwriting agreement follow, with trading generally beginning the next day.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 995+ Series 79 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Underwriting & New Financing questions
- Which entity is primarily responsible for declaring an IPO registration statement effective?
- A biotech company plans to IPO with a pre-money valuation of $800 million, offering 20 million shares. The company has…
- Which SEC registration form is typically used by a company conducting its first public offering?
- In the context of an IPO, what is the purpose of a 'comfort letter'?
- To be eligible to use Form S-3 for a primary offering, which of the following conditions must an issuer meet?
- What document is commonly referred to as the 'red herring'?
- A company that has been publicly reporting for 18 months but has a public float of only $50 million wants to conduct a…
- An investment bank is the lead bookrunner for a $500 million IPO. During the allocation process, the bank gives a…