Q$\backslash$#$3$: The Tobata Motor a private limited corporation one of the leading auto manufacturers in the world with total worldwide sales of $4\mathrm{.}48$ million vehicles last year decides to operate a new segment in South Korea. To finance their new operation, they decided to issue stocks to the public for the first time. What general procedures must Tobata Motor follow to go public via an initial public offering $($IPO$)?$ JP Morgan is assigned underwriter of Tobata Motors. What role does JP Morgan play in this a public offering?

Answer:

Q$\backslash$#$4$: Mini Case $2$: Merit Enterprise Corp.$($score: $1\mathrm{.}25)$

Sara Lehn, chief financial officer of Merit Enterprise Corp., was reviewing her presentation one last time before her upcoming meeting with the board of directors. Merit's business had been brisked for the past two years, and the company's CEO was pushing for a dramatic expansion of Merit's production capacity. Executing the CEO's plans would require $\backslash (\backslash$$ $4\backslash )$ billion in new capital in addition to $\backslash (\backslash$$ $2\backslash )$ billion in excess cash built up by the firm. Sara's immediate task was to brief the board on options for raising the needed $\backslash (\backslash$$ $4\backslash )$ billion.

Unlike most companies its size, Merit had maintained its status as a private company, financing its growth by reinvesting profits and, when necessary, borrowing from banks. Whether Merit could follow that same strategy to raise the $\backslash (\backslash$$ $4\backslash )$ billion necessary to expand at the pace envisioned by the firm's CEO was uncertain, although it seemed unlikely to Sara. She identified the following two options for the board to consider.