What is one of the primary reasons a company decides to file for an Initial Public Offering (IPO)?

To increase employee salaries To raise funds for capital expenditures (CAPEX) To avoid paying taxes To decrease its market valuation

Apart from raising capital, what is another potential benefit for a company going public?

Providing an exit strategy for early investors Reducing the number of shareholders Avoiding regulatory scrutiny Decreasing its public visibility

What is the role of a merchant banker in the IPO process?

Investing in the company's IPO Regulating the IPO market Assisting the company with various aspects of the IPO Setting the final IPO price

What does the acronym DRHP stand for in the context of an IPO?

Draft Red Herring Prospectus Detailed Regulatory Holding Procedure Direct Retail Holding Protocol Draft Revenue & Holdings Projection

What is the term used to describe the process of collecting bids from potential investors during an IPO?

Price Banding Book Building Green Shoe Option Underwriting

What is the term for an IPO where the share price is predetermined and not subject to a bidding process?

Fixed Price IPO Oversubscribed IPO Green Shoe IPO Dutch Auction IPO

Which of the following best describes the 'Green Shoe Option' in an IPO?

A mechanism allowing the company to issue additional shares if the IPO is oversubscribed A guaranteed return on investment for early investors A type of preferred stock offered to institutional investors A regulatory requirement for all IPOs

What happens to a company's shares after they transition from the primary market to the secondary market?

They are no longer available for public trading They become available for trading on the stock exchange They are exclusively held by institutional investors They are delisted from the stock exchange