Which of the Following Is Generally NOT True and an Advantage

question 10

Multiple Choice

Which of the following is generally NOT true and an advantage of going public?

• A) Facilitates stockholder diversification.
• B) Increases the liquidity of the firm's stock.
• C) Makes it easier to obtain new equity capital.
• D) Establishes a market value for the firm.
• E) Makes it easier for owner-managers to engage in profitable self- dealings.

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Definitions:

Finished Goods

Products that have undergone the manufacturing process and are ready for sale to consumers.

Raw Materials

Basic substances in their natural, modified, or semi-processed states used as an input in the manufacture of goods.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate projected overhead costs to products or services based on expected activity levels.

Actual Cost Driver

A factor that directly impacts the expenses associated with a specific activity, determining the actual costs incurred.