VEE Finance Exam Correctly Solved Questions And
Answers
1. Which of the following outlines the correct sequence Formation of underwrit-
of a traditional IPO process? ers and syndicates, SEC fil-
ings, Valuation
2. To estimate its company's value, Silveroar's invest- 23.33
ment bankers use data they have collected on compa-
rable companies that have recently gone public: Esti-
mate the IPO price for Silveroar using the price/earn-
ings ratio and price/revenues ratio.
3. Which of the following statements regarding the valu- III. The underwriters un-
ation in a traditional IPO process is/are true? dergo a process called
book building where they
adjust the share price to
customer demand so that
the IPO is most likely to
succeed.
4. Which of the following statements regarding equity I. Angel investors typically
financing is/are TRUE? invest in convertible notes.
and III. Private equity firms
use more debt to finance
purchases than other in-
vestors.
5. Determine which of the following statements regard- In the subsequent 3-5
ing IPO puzzles is TRUE. years after their IPOs,
newly listed firms appear
to underperform.
6. Over the years, a firm has raised money through the Series A gets $0.50million
following rounds of financing: Determine how the pro- Series B gets $0.45mil-
ceeds will be divided if the firm is sold at $2,000,000.
1/2
Answers
1. Which of the following outlines the correct sequence Formation of underwrit-
of a traditional IPO process? ers and syndicates, SEC fil-
ings, Valuation
2. To estimate its company's value, Silveroar's invest- 23.33
ment bankers use data they have collected on compa-
rable companies that have recently gone public: Esti-
mate the IPO price for Silveroar using the price/earn-
ings ratio and price/revenues ratio.
3. Which of the following statements regarding the valu- III. The underwriters un-
ation in a traditional IPO process is/are true? dergo a process called
book building where they
adjust the share price to
customer demand so that
the IPO is most likely to
succeed.
4. Which of the following statements regarding equity I. Angel investors typically
financing is/are TRUE? invest in convertible notes.
and III. Private equity firms
use more debt to finance
purchases than other in-
vestors.
5. Determine which of the following statements regard- In the subsequent 3-5
ing IPO puzzles is TRUE. years after their IPOs,
newly listed firms appear
to underperform.
6. Over the years, a firm has raised money through the Series A gets $0.50million
following rounds of financing: Determine how the pro- Series B gets $0.45mil-
ceeds will be divided if the firm is sold at $2,000,000.
1/2
