Based on vitamins and enzymes, explain why a meal of raw vegetables and fruits is generally healthier than a cooked meal of vegetables and fruits.

1) If the investment bank does not guarantee the sale of the securities, the investment bank is working on a best efforts deal. Once the investment bank sells the securities, investors must pay the bank within 10 days. If the IPO involves a large amount, investment banks form a selling group to distribute and sell the securities. Explanation: A best efforts deal means that the investment bank is not guaranteeing the sale of the securities and is only acting as a broker for the company. Investors who purchase the securities must pay the bank within 10 days. In cases where the IPO involves a large amount, investment banks may form a selling group to distribute and sell the securities to a wider range of investors. 2) Statements (a), (b), and (d) are true about the activities involved in the IPO process. Explanation: (a) During the roadshow, the IPO team can make forecasts and express their opinions about the projected value of the company after the IPO to lure institutional investors. (b) If the investment bankers in the book-building process realize that the demand for the securities is low, they can either reduce the offering price or consider withdrawing the IPO. (d) The IPO team goes on a roadshow, making presentations to institutional investors selected by the underwriter. Statement (c) is false. Investment bankers may underprice the IPO in order to generate demand, but the aim is not for investors to generate high profits, but rather to build demand and increase the likelihood of a successful IPO. 3) The correct answer is option (d) 4.68 million shares. Explanation: The net proceeds to the company is the offering price per share minus the spread charged by underwriters. If the offering price is $20 per share and the spread is 6.4%, the net proceeds to the company per share will be $18.72. To raise $73 million, the company needs to sell $73 million / $18.72 per share = 3.90 million shares. However, the underwriters usually have the option to purchase additional shares, called the overallotment option, which is exercised in case of high demand. If the overallotment option is exercised, the total number of shares sold will be 1.2 times the original offering. So, the company needs to sell 3.90 million x 1.2 = 4.68 million shares. 4) The theory that explains IPO underpricing is that the underwriter needs an honest indication of interest when book-building prior to the offering and underpricing is a possible way to secure this information from the institutional investors. Explanation: The book-building process is the process of determining the demand for the IPO by taking indications of interest from institutional and wealthy investors. The underwriter needs an honest indication of interest from these investors to ensure that the offering is successful. Underpricing the IPO is a way to generate interest from investors and secure their commitment to the IPO. Institutional investors are the ones who hold a large amount of capital and can provide an honest indication of interest.