Which of the Following Statements Is Correct

question 47

Multiple Choice

Which of the following statements is correct?

• A) One danger a family-owned business faces when it goes public is the loss of absolute voting control of the company,because there is no way to keep new stockholders from voting.
• B) The market is less active for small companies' shares,so these stocks must be included on the SEC's list in order to inform investors of their existence.Therefore,"listed shares" as the term is generally used refers to shares of smaller as opposed to larger companies.
• C) Before a company can offer a new issue of common stock to the public,it must get approval from the SEC for the price at which the stock can be sold.If the SEC thinks the proposed price is too high,then the company's prospectus is rejected and the stock cannot be sold.
• D) The preemptive right refers to stockholders' right to elect a company's board of directors.
• E) Each of the above statements is false.

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Definitions:

Ideological Themes

Central beliefs or principles that form the basis of a political, economic, or social system or movement.

Systems Thinking

A holistic approach to analysis that focuses on the way that a system's constituent parts interrelate and how systems work over time and within the context of larger systems.

Interdependencies

Mutual reliance between entities, where the actions or outcomes of one entity depend on those of another.

Organizational Processes

Entails the methods, procedures, and routines used within an organization to produce and deliver its products or services.