Which of the Following Is NOT a Potential Disadvantage Associated

question 32

Multiple Choice

Which of the following is NOT a potential disadvantage associated with a firm going public?

• A)A more liquid market for owners to sell their ownership shares.
• B)Because shares are more dispersed,management must work with a more diverse group of stakeholders.
• C)The firm faces more rigorous disclosure of its financial situation,and this disclosure requirement has both monetary and time costs.
• D)Management needs to more actively manage shareholder expectations and deal with some investors who have a short-term focus on profitability rather than long-term growth.

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Definitions:

Minimum Amount

The smallest quantity or value permissible, often used in the context of financial transactions or requirements.

Fixed Expenses

Costs that do not change in total regardless of changes in the level of activity or volume, such as rent and insurance premiums.

Net Operating Income

A profitability metric that calculates a company's potential income by subtracting operating expenses from revenue, excluding taxes and interest.

Sugar Beets

A root vegetable that is primarily cultivated for sugar production.