Which of the following statements is FALSE?
A) The one advantage of a cash offer is that the underwriter takes on a larger role and, therefore, can credibly certify the issue's quality.
B) SEO underwriting fees average about 5% of the proceeds of the issue and, as with IPOs, the variation across issues of different sizes is relatively small.
C) As with IPOs, evidence suggests that companies overperform following a seasoned offering.
D) Often the value destroyed by the price decline can be a significant fraction of the new money raised with a SEO.
Answer: C
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The important fact to recognize about the overall balance of payments is that it is always in balance, although imbalances do occur in subsets of the overall balance
Indicate whether the statement is true or false
Which of the following was part of the stability and growth pact that was required for countries to be part of the European Monetary Union?
A) The annual government budget must be no greater than 3% of GDP. B) The annual inflation rate must remain within 1.5% of the three best-performing EU countries. C) The annual government budget deficit could be no greater than 60% of GDP. D) The annual inflation rate must remain within 5.5% of the four best-performing EU countries.