Answer the following statements true (T) or false (F)
1. An underwriting syndicate is a group of investment bankers who help to distribute a new issue for a company.
2. One purpose of an underwriting syndicate is to distribute securities to the public.
3. The out-of-pocket cost to issue new common stock is always paid by the investment banker.
4. The issuing company desires to have as little underpricing of new securities as possible.
5. An underpriced offering represents a permanent lost opportunity to the issuing firm.
1. TRUE
2. TRUE
3. FALSE
-These costs are ultimately borne by the issuer.
4. TRUE
-Underpriced securities will sell rapidly, but are likely to "leave money on the table" that the issuing firm now cannot realize.
5. TRUE
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