One Result of Taking a Firm Private Is

question 131

Multiple Choice

One result of taking a firm private is

• A) the firm's stock is no longer available for purchase on the open market.
• B) managers lose some control as the number of stockholders increases.
• C) the public image of the firm will suffer.
• D) the firm will have access to more capital.

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Definitions:

Outstanding Accounts Receivable

The amount of money owed to a company by its customers for goods or services delivered but not yet paid for.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that is expected to become uncollectible.

Percent of Sales Method

A forecasting technique used in financial planning to estimate certain balance sheet and income statement accounts based on projected sales growth.

Bad Debts

Amounts owed to a company that are not expected to be received, often due to customers being unable to pay.