Which of the Following Is not Correct Relating to the Private

question 16

Multiple Choice

Which of the following is not correct relating to the Private Securities Litigation Reform Act of 1995?

• A)It provides certain small investors better recovery rights than it does large investors.
• B)It retains joint and several liability in certain circumstances.
• C)It makes recovery against CPAs more difficult under common law litigation.
• D)It eliminates securities fraud as an offense under civil RICO.

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Definitions:

Retained Earnings

This is the amount of net income left after a company has paid out dividends to its shareholders, typically reinvested in the business or held as a reserve.

Goodwill

An intangible asset that arises when a company acquires another company for a price higher than the fair market value of its net assets, representing future economic benefits.

Investment in Subsidiary

A financial stake held by a parent company in a subsidiary, characterized by ownership of more than 50% of the subsidiary's voting stock.

Pre-acquisition Profits

Earnings generated by a subsidiary prior to being acquired by a parent company, often considered in the determination of goodwill or investment value.