Which of the Following Statements Is NOT CORRECT

question 9

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) "going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares.
• B) publicly owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the sec.
• C) when stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public," and the market for such stock is called the new issue market.
• D) it is possible for a firm to go public and yet not raise any additional new capital.
• E) when a corporation's shares are owned by a few individuals who own most of the stock or are part of the firm's management, we say that the firm is "closely, or privately, held."

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Definitions:

Proportion

This refers to a part, share, or number considered in comparative relation to a whole.

Ronald Reagan

The 40th President of the United States, known for his economic policies known as Reaganomics, which focused on tax cuts, deregulation, and increased defense spending.

Marginal Tax Rate

Refers to the rate at which the next dollar of taxable income is taxed.

Tax Cuts

Reductions in the amount of taxes that individuals or corporations must pay to the government.