The Klodhoffer Corporation Has Assets Amounting to $2 Million and Needs

question 79

Essay

The Klodhoffer Corporation has assets amounting to $2 million and needs additional capital to finance expansion of its operation. The board of directors decides to promote an issue of $1.5 million of common stock in order to raise capital. At the time the stock is issued, Klodhoffer has 250 shareholders owning common stock. If Klodhoffer is to trade the stock over the counter, does it need to register with the SEC?

---

Definitions:

Price Wars

A competitive situation in which retailers and manufacturers continuously reduce prices to outdo each other, often resulting in minimal profits.

Comparative Advertising

A marketing strategy where a brand's product or service is directly compared to a competitor's to highlight its superiority.

Pure Monopoly

A market structure where a single seller has exclusive control over a product or service, with no close substitutes available.

Unique Product

A good or service that is distinct in its features, benefits, or value propositions from others in the market.