In the context of initial public offering, prior to the final prospectus being filed with the SEC, the company must issue a(n) _____ which is a preliminary prospectus whose purpose is to give potential investors as much information as possible before the sale is actually consummated.

Question

Quizplus · Accepted Answer

Prior to the final prospectus being filed with the SEC, the company must issue a red herring prospectus, named for the red writing that usually appears across the front of the document that identifies it as a preliminary prospectus. The purpose of the red herring prospectus is to give potential investors as much information as possible before the sale is actually consummated.

In the Context of Initial Public Offering, Prior to the Final