Which of the Following Statements Is FALSE

question 38

Multiple Choice

Which of the following statements is FALSE?

• A)The process of selling stock to the public for the first time is called a seasoned equity offering (SEO).
• B)Public companies typically have access to much larger amounts of capital through the public markets.
• C)By going public,companies give their private equity investors the ability to diversify.
• D)The two advantages of going public are greater liquidity and better access to capital.

---

Definitions:

Required Rate

The minimum annual percentage return that an investment must yield to be considered a viable option, often based on risk level, inflation, and alternative investment opportunities.

Stock Worth

The current market value of a company's shares.

Constant Rate

A fixed rate applied over a period of time, often used in the context of growth rates or interest rates.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shareholders typically receive dividends before common shareholders and have priority in the event of a liquidation.