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:

Unearned Revenue

The liability created by receiving revenue in advance.

Capital Account

A financial statement account that represents the ownership interests or equity in a company.

Closed

In accounting, this term refers to accounts that have been concluded for a period, typically at the end of an accounting cycle, by transferring their balances to permanent accounts.

Service Revenue

Income earned by a company from the services it provides to customers, as opposed to selling goods.