The Theory of Regulation Developed to Deal with "Natural Monopolies

question 203

Multiple Choice

The theory of regulation developed to deal with "natural monopolies" is called

• A) legal cartel theory.
• B) public interest theory.
• C) potential competition theory.
• D) social regulation theory.

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Definitions:

Private Placement

An offering of securities not made through the public market, but rather directly to a select group of investors or institutions.

Firm Commitment Basis

An underwriting method where an underwriter agrees to buy all securities offered by the issuer and assumes full risk of selling them to investors.

Rights Offering

A strategy by which companies raise additional capital, by giving existing shareholders the right to purchase additional shares at a predetermined price, usually at a discount.

Preemptive Privilege

The right given to existing shareholders to buy new shares before they are offered to the public, usually at a discount, to maintain their percentage of ownership.