An investment banker agrees to underwrite an issue of 10 million shares of stock for TWResearch, Inc. on a firm commitment basis. The investment banker pays $10.50 per share to TWResearch, Inc. for the 10 million shares of stock. It then sells those shares to the public for $11.20 per share.
Answer:
In a firm commitment offering, the investment banker bears the financial risk and buys the securities from TWResearch to sell to the public at its own terms.
In a best efforts offering, TWResearch, Inc. bears the financial risk and only makes its best efforts to sell the securities without buying them from TWResearch.
Explanation:
With a firm commitment offering, the investment banker enters into an agreement to purchase all the securities from TWResearch at an agreed price, and then, commits itself to selling the securities to the public at its own chosen price. As it pockets the ensuing gain or loss, the investment banker bears all the financial risk. With a best efforts offering, the investment banker does not assume inventory risk, but makes its best efforts in selling the securities. TWResearch bears the residual financial risk since the underwriter forwards to TWResearch all the proceeds from the issue, after deducting its commission.
Answer:
prepaid expense 15,500 debit
prepaid insurance 15,500 credit
Explanation:
<em>The amount of unexpired insurance will be the ending balance of the account</em>
4,500 debit
+ 16,600 premium paid
+/- adjustment
5,600 ending
4,500 + 16,600 - 5,600 = 15,500
Answer:
b. Horizontal merger.
Explanation:
Project Repat is merging with a company that produces similar products to its own markets them in similar markets as well, this is an example of a horizontal merger that results in increased synergies between the similar firms and a greater market share opportunity.
Vertical mergers are usually not in the same industry. They would either be with the suppliers of Project Repat or customers who retail Project Repat's products.
Conglomerate is an example of diversification and usually the merging firms have different operations.
There are no information of clashes of any sort within the two merging companies so it is uncertain whether this is a hostile takeover.
Hope that helps.
Answer:
The correct answer to the following question is Extreme value stores .
Explanation:
Extreme value stores are those type of stores which are also know as merchandise discount store, which are easily found in the low income rural and urban areas. These type of stores are usually small discount stores, who have very limited merchandise assortments and they offer those products at a very low price. The given examples of Aldi, Lidl, Dollar general and Family Dollar are all examples of Extreme value stores.
Answer: Introduction phase.
Explanation:
Campbell's company is going through the introduction phase of it's development cycle. In the introduction phase, a business; builds it's customer base, makes very little or no profit, observes slow growth rate and the running cost is usually high, but the business tends to stabilize as it enters the growth phase.
