As Part of a Stock Offering for Design Studio Corporation

question 48

Multiple Choice

As part of a stock offering for Design Studio Corporation, the firm's accountant Eve intentionally misrepresents material facts in the prospectus. Fred buys the stock unaware of the misrepresentation and suffers a loss. Eve may be subject to​

• A) ​none of the choices.
• B) ​job termination but no other sanctions, penalties, or liability.
• C) ​a fine, imprisonment, and damages.
• D) ​professional censure but no criminal sanctions or civil liability.

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Definitions:

Labor

The use of human physical and mental capabilities to generate goods and services.

Profit Maximization

The process or strategy a firm uses to achieve the highest possible profit from its operations.

Wage

The monetary compensation paid by employers to employees in exchange for their labor, typically calculated on an hourly, daily, or piece work basis.

Labor

The human effort, both physical and mental, employed in the production of goods and services.