Term
| Subchapter S Corporation - husband and wife... |
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Definition
| Counted as single shareholder |
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Term
| Subchapter S Corporation - gains and losses are allocated to investors by... |
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Definition
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Term
| Piggyback registration rights |
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Definition
| A covenant requiring the issuer to notify security holders of a pending IPO and giving those security holders the opportunity to sell the securities at the issuer's expense |
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Term
| ..... would not be underlying asset in asset backed security |
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Definition
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Term
| Underwriter oversells a new issue and the stock is trading BELOW the public offering price in secondary market... |
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Definition
| Underwriter would purchase the shares in the open market to close the oversold positions |
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Term
| Underwriter oversells a new issue and the stock is trading ABOVE the public offering price in secondary market... |
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Definition
| Underwriter would exercise the green shoe for up to 15% of the original deal size to close oversold position |
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Term
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Definition
| (LT Debt + ST Debt) / (LT debt + ST debt + shareholders equity) |
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Term
| When company repurchases stock, the acquisition cost of stock... |
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Definition
| is subtracted from shareholder's equity |
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Term
| Foreign company selling securities in the US to accredited investors... |
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Definition
| would NOT be required to file registration statement |
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Term
| Private placement requires the .... amount of due diligence.. |
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Definition
| same....as a registered offering |
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Term
| Registered rep needs approval from the firm if... |
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Definition
| Doing an outside securities transaction and is receiving non-cash compensation (ie commissions) |
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Term
| If FIFO company purchases a company using LIFO... |
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Definition
| pro-forma adjustments to acquirer would require an INCREASE in COGS and DECREASE in tax provisions |
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Term
| After reporting risk factors on 10K.. |
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Definition
| required to report any material changes to those risk factors on next 10Q |
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Term
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Definition
| allows purchaser to treat an equity acquisition as an asset sale for tax purposes and subsequently benefit from a stepped up basis |
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Term
| If an acquirer pays a golden parachute....not tax deductible to company...recipient pays ___% excise tax |
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Definition
| in excess of 3 times indiv's avg compensation for the last five years, the excess amount is not tax deductible...pay 20% excise tax |
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Term
| Company likely to found new niche market to target with product if... |
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Definition
| new entrant enters established industry and competitors have no discernable loss of revenue or mkt share |
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Term
| When broker dealer prepares fairness opinion for acquirer's BOD... |
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Definition
| sell side advisor and Target BOD will not preview the opinion |
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Term
| Preliminary prospectus is considered neither... |
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Definition
| an offer nor solicitation for securities |
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Term
| Profits from investments in Subchapter S corp... |
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Definition
| are never eligible to capital gains tax rates |
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Term
| Profits from an investment in Subchapter C corp... |
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Definition
| eligible for capital gains tax rates if held for more than one year |
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Term
| Increase in capacity utilization index.. |
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Definition
| indicate economic recovery in manufacturing sector |
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Term
| Canadian companies do not issue ADRs to trade in the US... |
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Definition
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Term
| When pricing IPO, lead manager would not consider...but would consider... |
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Definition
Not consider: shares allocated to each syndicate member
Consider: number of IOIs accepted, oversubscription of recent deals, pricing of recent deals |
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Term
| If client in broad auction wants to make bid more attractive without overpaying.. |
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Definition
| can offer shorter time to close |
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Term
| Securities issued under Regulation S... |
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Definition
| can trade immediately on an offshore securities exchange |
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Term
| An issuer would want its registration to become effective... |
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Definition
| on the day it prices the offering |
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Term
| 10Ks _____ audited financial statements...10Qs |
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Definition
| 10Ks do contain, 10Qs do NOT |
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Term
| NYSE and Nasdaq companies required to have ____ on audit committees |
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Definition
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Term
| Company executives could be investors in |
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Definition
| Regulation D private placement |
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Term
| To expand universe of comparables.. |
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Definition
| can look at supplier that distributes manufacturing products in same line of business and a company manufacturing in a niche market but not the same one as the subject company |
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Term
| Unsecured creditors committee... |
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Definition
| does not perfect liens on assets |
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Term
| Direct manufacturing costs are example of... |
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Definition
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Term
| Registered rep will disclose ____ years of employment history on U4.. |
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Definition
| 10 years, though firm will only verify most recent 3 yrs |
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Term
| Any securities related crime... |
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Definition
| is grounds for statutory disqualified, even a misdemeanor |
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Term
| When a bond is called away, investor receives... |
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Definition
| par value, the call premium, and final semi annual coupon payment |
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Term
| S-4 registration statement signed by.. |
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Definition
| CEO, CFO, Principal Accounting officer, and majority of BOD |
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Term
| Suitability requirements for institutions are.. |
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Definition
| different than for individuals, but they do still exist |
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Term
| In proxy statement, any shareholder... |
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Definition
| can submit a proposal, which the company will either recommend that SHs accept or reject |
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Term
| In best efforts underwriting, the escrow account... |
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Definition
| is maintained by a Qualified Financial Institution (ie bank), NOT an attorney |
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Term
| When a company repurchases shares for price in excess of par value.. |
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Definition
| may appear on B/S as reduction to capital surplus (APIC) |
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Term
| Fairness opinion must disclose compensation paid to firm writing it if... |
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Definition
| compensation contingent on successful completion of transaction |
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Term
| Nasdaq listing requirements... |
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Definition
| minimum thresholds for bid price, number of market makers, earnings, revenue, cash flow, market cap, and number of SH's. NO minimum price/book value requirement |
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Term
| Due diligence defense can be used... |
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Definition
| by an underwriter, attorney, employee of issuer, or an accountant who consented to be named in a registration statement. Defense requires that participant did reasonable investigation of the issuer and found nothing misleading or untruthful |
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Term
| In bankruptcy, subordinated debenture holders are paid.. |
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Definition
| after secured bond holders but before warrants |
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Term
| IPO roadshow is typically organized... |
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Definition
| primarily by syndicate manager |
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Term
| By signing a 10K, senior mgmt is certifying... |
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Definition
| reports are not misleading based on their knowledge and do not omit material information |
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Term
| Prospectus will not typically include... |
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Definition
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Term
| A family member of an employee of the issuer ______ purchase an IPO, but family member of FINRA member _____ |
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Definition
| issuer CAN, Finra member CANNOT |
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Term
| If person is deemed CE inactive... |
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Definition
| has to complete Continuing Education within two years to avoid retaking qualification exam |
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Term
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Definition
| carried back two years and carried forward 20 years to lower taxable income |
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Term
| FINRA can ____ a registrant |
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Definition
| can sanction, censure, or fine... CANNOT imprison |
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Term
| Any announcement of the signing of definitive agreement... |
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Definition
| is considered a prospectus and must be filed with the SEC no later than the date of first use |
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Term
| In Chpt 7 bankruptcy, creditor must always file... |
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Definition
| proof of claim in a timely fashion to be eligible to recover any funds owed |
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Term
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Definition
| does NOT need to file a proof of claim if debtor lists them on debt schedule and creditor does not disagree with the amount listed. If creditor disagrees, then need to file proof of claim in timely fashion |
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Term
| Upon maturity of bond, investor receives.. |
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Definition
| par value and final semi annual coupon payment |
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Term
| Underwriter can use due diligence defense for untrue info in registration statement if.. |
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Definition
| prove could not have known the info was untruthful |
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Term
| Open end funds are required... |
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Definition
| to register under Securities Act of 1933 |
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Term
| During due diligence, banker generally would not interview... |
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Definition
| target's largest shareholder |
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Term
| Order of interest rates from lowest to highest.. |
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Definition
| Fed funds rate, discount rate, broker's call rate, prime rate |
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Term
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Definition
| is designed to protect indiv investors |
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Term
| An issuer must....to be quoted on OTC Bulletin Board |
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Definition
| must have at least one market maker |
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Term
| Broker dealer would "have/not have" conflict of interest if employees..but clients |
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Definition
| would HAVE conflict of interest if employees owed 10% of issuer, but NOT if clients owed 10% |
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Term
| Fairness opinion does not |
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Definition
| make recommendation to SH's as to whether or not to vote to accept a deal |
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Term
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Definition
| securities are offered to a company's employees through an employee benefit plan |
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Term
| In a merger between two companies, the companies would file... |
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Definition
| a joint prospectus on an SEC Form S-4 to register securities |
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Term
| If a company sells securities in three states... |
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Definition
| issuer must comply with blue sky laws in all three states and rep selling securities must be appropriately registered in all three states |
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Term
| A free writing prospectus does not need to include... |
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Definition
| all the info in a registration statement, but must still be filed with SEC |
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Term
| A tender offer to buy shares of an overseas company.. |
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Definition
| must be registered with the SEC if the offer is being made to SH's in the US |
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Term
| Co A buy Co B for 2x book value and purchases and redeems all of outstanding debt in all stock trans, # shares issued equals... |
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Definition
| (2x Book value + net debt) / Co A stock price |
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Term
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Definition
| teaser, confidentiality agreement, CIM, initial procedures letter, initial bid, letter of intent, final bid procedures letter, final bid, definitive agreement |
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Term
| Acquisition would not be useful strategy for corporate executive who wishes... |
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Definition
| to retire and raise cash for family |
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Term
| In a tender offer, issuer generally ____ proxy statement |
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Definition
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Term
| An SEC filer who is not eligible to use an S-3 can distribute a free writing prospectus ... |
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Definition
| after filing a registration statement |
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Term
| Convertible debt would have ____ effect on common SH |
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Definition
| delayed and dilutive effect |
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Term
| When responding to a tender offer, the subject co can... |
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Definition
| accept, reject, remain neutral or state that it cannot take a position. It CANNOT recommend that SH purchase more shares of company |
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Term
| If auditor determines an illegal act may have occurred, first step is... |
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Definition
| to report this to the audit committee or to the BOD of the issuer |
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Term
| ____ copies of each form of preliminary prospectus must be filed with the SEC no later than... |
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Definition
| 5 copies...no later than date it is first sent to investors |
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Term
| ___ copies of final prospectus must be filed with SEC prior to... |
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Definition
| 10 copies..prior to date of first use |
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Term
| The most common benchmark for fixed income securities is... |
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Definition
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Term
| The fees that a broker dealer is receiving for advisory work can be found in.. |
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Definition
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Term
| When sell side advisor is doing due diligence in an all cash transaction, it is concerned with... |
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Definition
| only the buyer's ability to pay |
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Term
| An individual who is CE inactive |
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Definition
| could still work in a clerical role but could not be paid commissions or perform the duties of a registered person |
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Term
| What can / cannot trade under Rule 144A |
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Definition
| Corporate bonds can trade under Rule 144A, but open-end funds, UITs (Unit Investment Trusts) and ETFs would not |
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Term
| Transaction comps analysis would generally not be used.. |
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Definition
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Term
| When would need to file 13D |
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Definition
| If 3 shareholders each owning 3% of the voting shares of a company agree to vote their shares together, need to file 13D |
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Term
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Definition
| is a violation if the company discusses a new issue after deciding to proceed with an IPO but prior to registration of its shares |
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Term
| An open-end fund (ie mutual fund) must be... |
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Definition
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Term
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Definition
| Issuer sells shares on delayed or continuous basis at various times and prices |
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Term
| An increase in the Producer Price index.. |
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Definition
| would have an adverse impact on the stock price of a manufacturing company |
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Term
| A fairness opinion is most likely to be used.. |
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Definition
| when a target company's board is recommending that SH's vote to accept a transaction |
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Term
| A fairness opinion is typically prepared by... |
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Definition
| the sell-side adviser and reviewed by the Target's BOD. Buy-side adviser will not have a chance to review the fairness opinion |
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Term
| In order to stabilize, the underwriter.. |
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Definition
| must make disclosure of its intention to do so in the prospectus |
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Term
| If a firm cannot record instant messaging communications between its employees and clients.. |
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Definition
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Term
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Definition
| are not aggregated with other offerings made more than six months after the completion of the transaction |
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Term
| Accredited investor is... |
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Definition
| a married couple with $300K in net income or $1MM in net worth |
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Term
| An asset purchase agreement would NOT include... |
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Definition
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Term
| In order for a rep to borrow money from a customer.. |
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Definition
| the member firm must have written procedures in place and the customer must be a bank, family member, or have an outside relationship with a rep |
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Term
| Written disclosure of a conflict of interest must be made... |
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Definition
| no later than the completion of a transaction |
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Term
| A 10Q does not include... |
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Definition
| a list of company shareholders |
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Term
| The total takedown might also be referred to as... |
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Definition
| the "underwriting concession" or "underwriting allowance" |
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Term
| Regulation S securities can be sold.. |
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Definition
| immediately on SEC designated offshore securities exchange |
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Term
| The creditor committee in a bankruptcy does NOT... |
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Definition
| perfect liens for secured creditors |
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Term
| In a forward triangular merger... |
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Definition
| target becomes part of subsidiary and as long as at least 50% of the consideration is stock, only the cash consideration is taxable to TargetCo shareholders |
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Term
| In a reverse triangular merger... |
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Definition
| the subsidiary of the purchaser becomes part of the target, and as long as at least 80% of the consideration is stock, only the cash consideration is taxable to TargetCo shareholders |
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Term
| A proxy statement must be provided to SH's.. |
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Definition
| at least 20 days prior to the annual shareholders meeting |
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Term
| Following an IPO, a security can trade away from its primary exchange... |
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Definition
| only after the shares have traded on the primary exchange |
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Term
| If two companies have a similar P/E but one company has a higher EV/EBITDA, what might account for difference |
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Definition
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Term
| A list of the company's largest SH's can be found in a |
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Definition
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Term
| Pre-IPO shares will have... |
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Definition
| a legend attached confirming they are not registered |
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Term
| If a registered rep participates in a securities transaction outside the jurisdiction of their firm, but does not receive compensation... |
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Definition
| written notice is still required to the firm but permission is not |
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Term
| In an all cash transaction, the proxy statement |
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Definition
| is not required to include pro forma financials |
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Term
| When an issuer files an amendment to the registration statement... |
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Definition
| it will delay the effective date of an offering as the 20 day cooling off period will restart |
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Term
| Any transaction involving a transfer of funds from a country with whom the US does not do business or has embargoes or sanctions in place (Cuba, N Korea, Iran, etc) |
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Definition
| must be blocked and reported to OFAC within 10 days |
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Term
| A cross-default clause in a bond indenture... |
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Definition
| will trigger a default on a specific tranche of debt if the issuer defaults on any of its debt obligations |
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Term
| Regulation M restricted period.. |
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Definition
| concerns distribution of securities related to M&A activity, and it begins the day proxy materials are distributed to SH's |
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Term
| In a bankruptcy proceeding, administrative claims (lawyer fees, etc) are paid before / after any recently unpaid wages |
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Definition
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Term
| A distribution of an S Corp that reduces an investor's basis |
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Definition
| is considered a non-taxable return of capital. If it does not reduce an investor's basis, it is taxable as ordinary income |
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Term
| A company has greater operating leverage if... |
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Definition
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Term
| Proxy to elect BOD would include...but NOT... |
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Definition
| attendance at last year's meetings, compensation, a list of nominating and compensation committee members, but NOT last year's votes |
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Term
| A list of a company's largest SH can be found in a.. |
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Definition
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Term
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Definition
| Municipal bonds, treasuries, commercial paper, commercial bank securities, and securities issued by non-profits |
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Term
| Stabilization can be initiated at.. |
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Definition
| the lower of the last transaction price or the public offer price |
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Term
| A company repurchasing its own shares could bid.. |
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Definition
| the greater of the current bid or the last sale price |
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Term
| The syndicate desk does NOT... but does help... |
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Definition
| does not participate in drafting of offering documents, but does help plan a road show, stabilize, and identify investors |
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Term
| A broker dealer does NOT need to keep a record of...it must keep a record of... |
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Definition
| Does not keep record of prospectuses, red herrings, and registration statements. It must keep a record of complaints, correspondence, and trade confirmations |
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Term
| Prospectus includes....but does not require |
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Definition
| Includes a capitalization table...5 year projections not required |
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