Which of the Following Advantages of Going Public Simultaneously Implies

question 12

Multiple Choice

Which of the following advantages of going public simultaneously implies a potential disadvantage of going public?

• A)Facilitates in stockholder diversification.
• B)Changes liquidity of the firm's stock.
• C)Alters the difficulty associated with obtaining capital.
• D)Establishes a market value for the firm.
• E)Changes name recognition of the company.

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Definitions:

Oligopoly

A market structure in which a small number of firms have the large majority of market share.

Cournot Model

An economic model used to describe an industry structure in which companies compete on the amount of output they will produce, which they decide independently of each other and at the same time.

Dominant Price Leader

A dominant firm that sets the price of a good or service within the market, which other firms then follow, often seen in oligopolistic markets.

Monopolist

An individual or entity that has exclusive control over the supply of a particular good or service, potentially influencing prices and market conditions.