Which of the Following Statements Is True

question 11

Multiple Choice

Which of the following statements is true?

• A) Rule 144A was instituted to decrease liquidity and increase issuing costs in the private-placement market.
• B) Rule 144A was instituted to increase liquidity and decrease issuing costs in the private-placement market.
• C) Rule 144A was instituted to increase liquidity and decrease issuing costs in the public-placement market.
• D) Rule 144A was instituted to decrease liquidity and increase issuing costs in the public-placement market.

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Definitions:

Voting Shares

Shares that give the shareholder the right to vote on company matters, such as electing directors and approving major company decisions.

Net Assets

represent the residual interest in the assets of an entity after deducting its liabilities.

Fair Market Value

An estimate of the price at which an asset would change hands between willing buyers and sellers in an arms-length transaction.

Book Value

The net value of a company's assets, subtracting liabilities from the total assets, often used to determine a company's worth.