All Related Questions of Private Placement

Q: Jackson is a sophisticated investor. As such, she was initially

Jackson is a sophisticated investor. As such, she was initially a member of a small group that was going to participate in a private placement of $1 million of common stock of Clarion Corporation. Num...

Q: The following multiple choice questions concern interest-bearing liabilities. Choose the

The following multiple choice questions concern interest-bearing liabilities. Choose the best response. a. The audit program for long-term debt should include steps that require the (1) Verification...

Q: On January 1, 2018, Instaform, Inc., issued 10

On January 1, 2018, Instaform, Inc., issued 10% bonds with a face amount of $50 million, dated January 1. The bonds mature in 2037 (20 years). The market yield for bonds of similar risk and maturity i...

Q: The 2018 annual report of MLS Corporation included the following disclosure note

The 2018 annual report of MLS Corporation included the following disclosure note: Note 10: Borrowings (in part) Convertible Debt On June 15, 2018, we issued $125 million of zero coupon convertible uns...

Q: What is a private placement of securities?

What is a private placement of securities?

Q: You need to choose between making a public offering and arranging a

You need to choose between making a public offering and arranging a private placement. In each case the issue involves $10 million face value of 10-year debt. You have the following data for each: A...

Q: After each of the following issue methods, we have listed two

After each of the following issue methods, we have listed two types of issue. Choose the one more likely to employ that method. a. Rights issue (initial public offer/further sale of an already public...

Q: For each of the following pairs of issues, which is likely

For each of the following pairs of issues, which is likely to involve the lower proportionate underwriting and administrative costs? a. A large issue/a small issue b. A bond issue/a common stock iss...

Q: Explain the three principal ways in which the terms of private placement

Explain the three principal ways in which the terms of private placement bonds commonly differ from those of public issues.

Q: Arbortech, a designer, manufacturer, and marketer of PC cards

Arbortech, a designer, manufacturer, and marketer of PC cards for computers, printers, telecommunications equipment, and equipment diagnostic systems, was the darling of Wall Street during Year 6. Its...

Q: Why might a large corporation want to raise long-term capital

Why might a large corporation want to raise long-term capital through a private placement rather than a public offering?

Q: The following information was taken from the 2012 financial statements of Dentsply

The following information was taken from the 2012 financial statements of Dentsply International, a company that develops, manufactures, and markets medical equipment and supplies for the global denta...

Q: [A] Aon Corporation’s Mezzanine Preferred Stock In its 2002 annual

[A] Aon Corporation’s Mezzanine Preferred Stock In its 2002 annual report to shareholders, Aon Corporation described its mandatorily redeemable preferred stock as follows: In January...

Q: A U.S. insurance company invests $1,000

A U.S. insurance company invests $1,000,000 in a private placement of British bonds. Each bond pays £300 in interest per year for 20 years. If the current exchange rate is £1.364/$, what is the nature...

Q: Ivanhoe Energy, a Canadian company, incurs net foreign exchange adjustments

Ivanhoe Energy, a Canadian company, incurs net foreign exchange adjustments in 2010. The U.S. dollar is the functional currency. In 2010, the Canadian dollar continued to strengthen relative to the U....

Q: A U.S. insurance company invests $1,000

A U.S. insurance company invests $1,000,000 in a private placement of British bonds. Each bond pays £300 in interest per year for 20 years. If the current exchange rate is £1.5612 for US$1, what is th...

Q: On December 7, 2008, Alpharm issued shares of convertible preferred

On December 7, 2008, Alpharm issued shares of convertible preferred stock and warrants to purchase additional shares of preferred stock for an aggregate issue price of $46,180,000 in a private placeme...

Q: Nalco Holding is an international company that operates in 130 countries,

Nalco Holding is an international company that operates in 130 countries, has a market capitalization (market value of equity) of $2.3 billion, and reported net income of $45 million on $3.3 billion i...

Q: What are the disadvantages of a private placement sale compared with a

What are the disadvantages of a private placement sale compared with a public sale?

Q: Explain why time might play a significant role during low-interest

Explain why time might play a significant role during low-interest periods in a decision of whether to choose a private placement or public sale?

Q: What are the characteristics of a public bond? (Think in

What are the characteristics of a public bond? (Think in terms of comparing it to private placement and bank term loans.)

Q: Brad Gokool is reviewing the results of the subsequent events audit procedures

Brad Gokool is reviewing the results of the subsequent events audit procedures. Brad is writing a report for his audit partner based on these results and will be attending a meeting tomorrow with the...

Q: Lassiter Bakery currently has 3 million shares of common stock outstanding that

Lassiter Bakery currently has 3 million shares of common stock outstanding that sell at a price of $25 per share. Lassiter also has $10 million of bank debt outstanding at a pretax interest rate of 12...

Q: What is a private placement? What are the comparative pros and

What is a private placement? What are the comparative pros and cons of private placement versus a pubic issue?

Q: Randy’s, a family- owned restaurant chain operating in Alabama,

Randy’s, a family- owned restaurant chain operating in Alabama, has grown to the point that expansion throughout the entire Southeast is feasible. The proposed expansion would require the firm to rais...

Q: What is a private placement versus a public offering?

What is a private placement versus a public offering?

Q: Randy’s, a family-owned restaurant chain operating in Alabama,

Randy’s, a family-owned restaurant chain operating in Alabama, has grown to the point that expansion throughout the entire Southeast is feasible. The proposed expansion would require the firm to raise...

Q: 1. Why was the Facebook IPO not as successful as was

1. Why was the Facebook IPO not as successful as was initially hoped? a. Not enough shares were offered b. The investment banks set the offering price too low c. Disappointing news occurred shortly...

Q: Eco-Products’ management developed a confidential private placement memorandum (PPM

Eco-Products’ management developed a confidential private placement memorandum (PPM) dated October 16, 2007, in an attempt to raise $3,500,000. Appendix A contains excerpts from the PPM. 1. What is me...

Q: Etsy, Inc., provides a technology platform aimed at allowing sellers

Etsy, Inc., provides a technology platform aimed at allowing sellers to turn their creative passions into economic opportunities. Presented below are excerpts from its December 31, 2018 Form 10-K. Sou...

Q: Cephalon Inc. issued $750 million of zero-coupon convertible

Cephalon Inc. issued $750 million of zero-coupon convertible notes. Because the notes were issued at par, meaning that Cephalon received $750 million cash for the notes, they have a zero yield-to-matu...

Q: On January 1, 2021, Instaform, Inc., issued 10

On January 1, 2021, Instaform, Inc., issued 10% bonds with a face amount of $50 million, dated January 1. The bonds mature in 2040 (20 years). The market yield for bonds of similar risk and maturity i...

Q: The 2020 annual report of Mills General Corporation (MGC) included

The 2020 annual report of Mills General Corporation (MGC) included the following disclosure note: Note 10: Borrowings (in part) Convertible Debt On July 1, 2020, we issued $125 million of zero coupon...

Q: Domestic Transfer and Storage is a large trucking company headquartered in the

Domestic Transfer and Storage is a large trucking company headquartered in the Midwest. Rapid expansion in recent years has been financed in large part by debt in a variety of forms. In preparing the...

Q: Domestic Transfer and Storage is a large trucking company headquartered in the

Domestic Transfer and Storage is a large trucking company headquartered in the Midwest. Rapid expansion in recent years has been financed in large part by debt in a variety of forms. In preparing the...

Q: Arbortech, a designer, manufacturer, and marketer of PC cards

Arbortech, a designer, manufacturer, and marketer of PC cards for computers, printers, telecommunications equipment, and equipment diagnostic systems, was the darling of Wall Street during Year 6. Its...

Q: If the economy continues to be strong, Carson Company may need

If the economy continues to be strong, Carson Company may need to increase its production capacity by about 50 percent over the next few years to satisfy demand. It would need financing to expand and...

Q: Carson Company is considering a private placement of bonds with Venus Mutual

Carson Company is considering a private placement of bonds with Venus Mutual Fund. a. Explain the interaction between Carson and Venus. How would Venus Mutual Fund serve Carson’s needs, and how would...

Q: Carson Company is considering a private placement of equity with Secura Insurance

Carson Company is considering a private placement of equity with Secura Insurance Company. a. Explain the interaction between Carson Company and Secura. How will Secura serve Carson’s needs, and how...

Q: Sander Persaud is an audit manager for a national public accounting firm

Sander Persaud is an audit manager for a national public accounting firm. Every summer, the firm recruits several university students as interns. One such intern is Taylor Jay, a high-performing stude...

Q: Briefly explain the distinction between the two items that make up each

Briefly explain the distinction between the two items that make up each of the following pairs: a. Direct financing versus indirect financing b. Primary markets versus secondary markets c. Organized e...