Use the Following Statements to Answer This Question

question 50

Multiple Choice

Use the following statements to answer this question:
I.One of the most frequently cited reasons of why a firm goes public is because investors want to cash out.
II.Obtaining cheaper sources of financing over the long term is a potential reason for an IPO.

• A)I and II are correct.
• B)I and II are incorrect.
• C)I is correct and II is incorrect.
• D)I is incorrect and II is correct.

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Definitions:

Straight-Line Depreciation

A method of calculating the depreciation of an asset where its cost is evenly spread across its useful life.

Initial Investments

The initial amount of money spent to start a project, purchase assets, or establish a business.

After-Tax Discount Rate

The rate of return after taxes have been calculated, used in evaluating the profitability of investment opportunities.

Income Tax Rate

The rate at which income is taxed for a person or a company.