Which of the Following Statements Is FALSE

question 30

Multiple Choice

Which of the following statements is FALSE?

• A)Once a company goes public,it must satisfy all of the requirements of public companies.
• B)Organizations such as the Securities and Exchange Commission (SEC),the securities exchanges (including the New York Stock Exchange and the NASDAQ),and Congress (through the Sarbanes-Oxley Act of 2002)adopted new standards that focused on more thorough financial disclosure,greater accountability,and more stringent requirements for the board of directors.
• C)The major advantage of undertaking an IPO is also one of the major disadvantages of an IPO: When investors diversify their holdings,the equity holders of the corporation become more concentrated.
• D)Several high-profile corporate scandals during the early part of the twenty-first century prompted tougher regulations designed to address corporate abuses.

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Definitions:

Sales Commissions

Payments made to sales personnel based on the sales volume or value they have achieved.

Opportunity Cost

The potential benefit that is given up when one alternative is selected over another.

Variable Selling

Variable selling costs are expenses that fluctuate with sales volume, such as commissions and credit card fees, which increase as sales increase.

Administrative Expense

Costs related to the general administration of a business, such as salaries of executive officers and costs of the head office.