Which of the Following Is NOT Generally Considered a Cost

question 8

Multiple Choice

Which of the following is NOT generally considered a cost of going public?

• A)Agency Costs of Managerial Discretion: Separating ownership and control leads to such costs, though they can be mitigated with monitoring, incentive contracting, etc.
• B)Information Asymmetry: Disclosure requirements may compromise the firm's strategic position in the industry.
• C)Taxes: Public firms face higher federal and state tax rates than private firms.
• D)Performance Pressures: Management will face pressure for performance from investors, the financial press, equity research analysts, and bond rating agencies.
• E)Distractions: Management is often distracted by time-consuming investor-relations tasks, such as press releases, personal visits from or to major shareholders, etc.

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Definitions:

Trusting Attitude

A predisposition to believe that others are reliable and have good intentions.

Hostile Attitude

Exhibiting anger, antagonism, or opposition toward others or situations, often as a defensive or coping strategy.

Child Rearing

The process and methods used by parents and caregivers to support and guide a child's development.

Primacy

The principle that items or information presented first are usually remembered better than items presented later.