Use the Following Statements to Answer This Question

question 38

Multiple Choice

Use the following statements to answer this question:
I.Risk of information asymmetry is high in an IPO because the company's public disclosure, as a public firm, is minimal.
II.An IPO prospectus eradicates the issue of information asymmetry completely.

• A)I and II are correct.
• B)I and II are incorrect.
• C)I is correct and II is incorrect.
• D)I is incorrect and II is correct.

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Definitions:

Strategic Analysis

The process of conducting research on the business environment and the company itself to formulate strategy.

Environmental Concerns

Issues related to the natural environment due to human activities or processes, including pollution, natural resource depletion, and climate change.

Strategic Planning

The process of defining a company's direction and making decisions on allocating resources to pursue this direction.

Competitive Intelligence

The gathering and analysis of information about competitors, market trends, and other external factors affecting a business's competitive position.