Fleet Delivery Corporation Is a Public Company with a Market

question 51

Multiple Choice

Fleet Delivery Corporation is a public company with a market capitalization of less than $75 million. Fleet is poised to issue securities in a transaction that, under the Securities Act of 1933, is "exempt." This enables Fleet to​

• A) ​reduce the compliance costs by not requiring an auditor report.
• B) ​buy and sell the securities without liability for "recaptures."
• C) ​make forward-looking financial forecasts without liability.
• D) ​withhold inside information from accredited investors.

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Definitions:

Temporary Investments

Investments not intended to be held for a long term, such as stocks or bonds, purchased with the intention of selling in the near future.

Accounts Receivable

Money that is owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Quick Ratio

A liquidity measure that indicates a company’s ability to pay its current liabilities without relying on the sale of inventory, calculated as (current assets - inventories) / current liabilities.

Liability Likelihood

Refers to the probability that a company will be responsible for payment due to a debt, claim, or lawsuit.