Which of the Following Statements Is False

question 42

Multiple Choice

Which of the following statements is false?

• A) More often than not, firms return to the equity markets and offer new shares for sale, a type of offering called a seasoned equity offering (SEO).
• B) Usually, profitable growth opportunities occur throughout the life of the firm, and in some cases it is not feasible to finance these opportunities out of retained earnings.
• C) When a firm issues stock using an SEO, it follows many of the same steps as for an IPO. The main difference is that a market price for the stock already exists, so the price-setting process is not necessary.
• D) A firm's need for outside capital usually ends at the IPO.

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Definitions:

Depreciation Deduction

A tax deduction that allows the cost of an asset to be spread over its useful life.

Depreciation Tables

Charts or schedules provided by tax authorities that outline how to depreciate assets over their useful lives for tax purposes.

Land Value

The market value of a piece of land, not including any buildings, improvements, or other structures on it.

Schedule K-1

A tax document used to report the income, losses, and dividends of a partnership or S corporation's shareholders or partners.