Which of the Following Statements Is NOT CORRECT

question 11

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) "Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares.
• B) Publicly owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the SEC.
• C) When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public," and the market for such stock is called the new issue market.
• D) It is possible for a firm to go public and yet not raise any additional new capital.
• E) When a corporation's shares are owned by a few individuals who own most of the stock or are part of the firm's management, we say that the firm is "closely, or privately, held."

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Definitions:

Hybrid Rule Making

A type of rule making that combines features of formal and informal rule making; consists of publication in the Federal Register, a written-comment period, and an informal public hearing with restricted cross-examination.

Commissioners

Officials charged with the administration of certain laws and regulations, often within a specific governmental agency or commission.

Informal Agency Rule Making

A process used by administrative agencies to create rules and regulations through procedures that are less formal than the traditional rulemaking process, often involving less public input.

Privacy Act

Legislation designed to protect the personal information of individuals from unauthorized use or disclosure by the government or other entities.