Which of the Following Statements Is Correct

question 47

Multiple Choice

Which of the following statements is correct?

• A) One danger a family-owned business faces when it goes public is the loss of absolute voting control of the company,because there is no way to keep new stockholders from voting.
• B) The market is less active for small companies' shares,so these stocks must be included on the SEC's list in order to inform investors of their existence.Therefore,"listed shares" as the term is generally used refers to shares of smaller as opposed to larger companies.
• C) Before a company can offer a new issue of common stock to the public,it must get approval from the SEC for the price at which the stock can be sold.If the SEC thinks the proposed price is too high,then the company's prospectus is rejected and the stock cannot be sold.
• D) The preemptive right refers to stockholders' right to elect a company's board of directors.
• E) Each of the above statements is false.

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Definitions:

Expectancy Disconfirmation Model

A theory that suggests consumer satisfaction is based on the gap between expected and actual performance of a product or service.

Consumer Dissatisfaction

A negative emotional state that occurs when a product or service fails to meet a consumer's expectations.

Disposal Options

The various methods and strategies available for discarding or getting rid of waste, surplus, or unwanted items.

Cognitive Dissonance

The mental discomfort experienced by an individual who holds two or more contradictory beliefs, values, or ideas at the same time.