Which of the Following Statements Is Correct

question 25

Multiple Choice

Which of the following statements is correct?

• A) The SEC must approve the price at which a stock is to be offered to the public when a company "goes public."
• B) If a company's stock is listed,then it trades in the over-the-counter (OTC)market.
• C) If the "preemptive right" exists in a company's charter,then the holders of its Class A shares have the right to receive a specified amount of dividends before dividends can be paid on Class B shares.
• D) A "prospectus" is a document which describes a company and the securities it plans to offer,and the prospectus generally must be approved by the SEC before a public offering of new securities can be made.
• E) The decision to list a company's stock generally is more important to the company than the decision to go public,i.e. ,listing has a larger impact on the way the firm is operated than does going public.