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."

---

Definitions:

Market-Determined Quantity

Refers to the quantity of a good or service that is established through the interaction of supply and demand within a market.

Marginal Social Benefit

The additional benefit that society gains from the production or consumption of one more unit of a good or service.

Marginal Social Cost

The total cost to society of producing one additional unit of a good or service, considering both private costs and externalities.

Coal Mine Pollution

Environmental damage caused by the extraction and processing of coal, including air and water pollution.