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Regarding the special purpose acquisition companies (SPACs), consider the following statements:
1. An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.
2. This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
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Regarding the special purpose acquisition companies (SPACs), consider ...
Earlier this month, the US Securities and Exchange Commission (SEC) issued an investor alert, which was the first warning of sorts, when it came to or special purpose acquisition companies (SPACs).
- An SPAC, or a blank-cheque company, is an entity specifically set up with the objective of acquiring a firm in a particular sector.
- The aim of this SPAC is to raise money in an initial public offering (IPO), and at this point in time, it does not have any operations or revenues.
- Once the money is raised from the public, it is kept in an escrow account, which can be accessed while making the acquisition. If the acquisition is not made within two years of the IPO, the SPAC is delisted and the money is returned to the investors.
- Certain market participants believe that, through an SPAC transaction, a private company can become a publicly-traded company “with more certainty as to pricing and control over deal terms as compared to traditional IPOs.
- In India, renewable energy producer ReNew Power last month announced an agreement to merge with RMG Acquisition Corp II, a blank-cheque company, in what became the first involving an Indian company during the latest boom in SPAC deals.
Most Upvoted Answer
Regarding the special purpose acquisition companies (SPACs), consider ...
Statement 1: An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.
Statement 2: This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.
To determine which statements are correct, let's analyze each one individually:
Statement 1: An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.
This statement is correct. A special purpose acquisition company (SPAC) is a type of company that is formed with the sole purpose of acquiring or merging with another company. SPACs are typically created by investors, also known as sponsors, who have expertise in a specific industry or sector. The SPAC is established as a "shell" company, meaning it has no operations or business activities other than its intent to acquire another company. Once the SPAC raises funds through an initial public offering (IPO), it uses those funds to identify and acquire a target company within a specific sector.
Statement 2: This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.
This statement is also correct. SPACs raise money through an IPO, where they offer shares to the public. The funds raised during the IPO are held in a trust or escrow account until the SPAC identifies a target company to acquire. As the SPAC does not have any operations or revenues initially, the IPO serves as a means to raise capital that will be used for the future acquisition. The funds raised through the IPO are typically invested in low-risk assets such as government securities or money market funds until a suitable target is found.
Therefore, both statements 1 and 2 are correct. SPACs are formed to acquire firms in specific sectors, and they raise money through an IPO without having any operations or revenues initially. SPACs provide an alternative route for companies to go public and raise capital, bypassing the traditional IPO process.
Statement 2: This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.
To determine which statements are correct, let's analyze each one individually:
Statement 1: An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.
This statement is correct. A special purpose acquisition company (SPAC) is a type of company that is formed with the sole purpose of acquiring or merging with another company. SPACs are typically created by investors, also known as sponsors, who have expertise in a specific industry or sector. The SPAC is established as a "shell" company, meaning it has no operations or business activities other than its intent to acquire another company. Once the SPAC raises funds through an initial public offering (IPO), it uses those funds to identify and acquire a target company within a specific sector.
Statement 2: This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.
This statement is also correct. SPACs raise money through an IPO, where they offer shares to the public. The funds raised during the IPO are held in a trust or escrow account until the SPAC identifies a target company to acquire. As the SPAC does not have any operations or revenues initially, the IPO serves as a means to raise capital that will be used for the future acquisition. The funds raised through the IPO are typically invested in low-risk assets such as government securities or money market funds until a suitable target is found.
Therefore, both statements 1 and 2 are correct. SPACs are formed to acquire firms in specific sectors, and they raise money through an IPO without having any operations or revenues initially. SPACs provide an alternative route for companies to go public and raise capital, bypassing the traditional IPO process.
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Regarding the special purpose acquisition companies (SPACs), consider the following statements:1. An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.2. This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?
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Regarding the special purpose acquisition companies (SPACs), consider the following statements:1. An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.2. This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for Current Affairs 2024 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about Regarding the special purpose acquisition companies (SPACs), consider the following statements:1. An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.2. This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Current Affairs 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Regarding the special purpose acquisition companies (SPACs), consider the following statements:1. An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.2. This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
Regarding the special purpose acquisition companies (SPACs), consider the following statements:1. An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.2. This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for Current Affairs 2024 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about Regarding the special purpose acquisition companies (SPACs), consider the following statements:1. An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.2. This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Current Affairs 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Regarding the special purpose acquisition companies (SPACs), consider the following statements:1. An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.2. This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
Solutions for Regarding the special purpose acquisition companies (SPACs), consider the following statements:1. An SPAC, or a blank-cheque company, is an entity specifically set up to acquire a firm in a particular sector.2. This SPAC aims to raise money in an initial public offering (IPO), and at this point, it does not have any operations or revenues.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for Current Affairs.
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