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Chapter 19:   The Capital Market

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1. Shelf registration offers increased flexibility, allowing a company to time its sale of securities to market conditions.

2. A privileged subscription is one offered only to the privileged few who have a net worth of over $100 million.

3. Standby arrangements are used to ensure the success of a rights offering.

4. Rule 144a makes it tougher to resell privately placed securities.

5. When stocks are bought "rights-on," the buyer is generally entitled to receive one right for each share of stock owned.

6. Private placements typically do not have to be registered with the SEC.

7. Registration with the SEC is not required if the new stock issue is intended for investors only in 2 states, say Oregon and California only.

8. The issuing of a security can be interpreted as giving some information about the issuing company.

9. An IPO is sold in the secondary market.

10. The shareholder may dispose of rights issued in a rights offering simply by doing nothing.

11. The US Securities and Exchange Commission (SEC) does not evaluate the investment value or merit of the securities it reviews.

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