​ Which of the Following Statements Is NOT CORRECT

question 24

Multiple Choice

​ Which of the following statements is NOT CORRECT?

• A) ​When a corporation's shares are owned by a few individuals and are not traded on public markets, we say that the firm is "closely, or privately, held."
• B) ​"Going public" establishes a firm's true intrinsic value, and it also insures that a highly liquid market will always exist for the firm's shares.
• 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) ​Publicly owned companies have shares owned by investors who are not associated with management, and public companies must register with and report to a regulatory agency such as the SEC.
• E) ​It is possible for a firm to go public and yet not raise any additional new capital at the time.

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Definitions:

Anticompetitive Monopolist

A single seller in a market who uses their dominant position to prevent or reduce competition through unfair practices.

Antitrust Laws

Regulations established by governments to prevent large businesses from monopolizing certain markets, ensuring fair competition.

Industry Structure

The characteristics and organization of an industry, including the number and size of companies, entry barriers, and level of competition.

Herfindahl Index

An economic measure of market concentration that sums the squares of the market shares of all firms within the industry.