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:

Civil Service System

A merit-based selection system for government employees excluding military and political appointments, aimed at ensuring competence and impartiality.

Politics

The activities associated with governance, or the debate and conflict among individuals or parties having or hoping to achieve power.

Pendleton Act

A federal law enacted in 1883 that established that positions within the federal government should be awarded on the basis of merit instead of political affiliation.

Spoils System

A practice where a political party, after winning an election, gives government jobs to its voters as a reward for working toward victory.