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.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest in the company.

Common Share

A type of equity ownership in a corporation, entitling holders to vote on corporate matters and receive dividends.

Price-Earnings Ratio

A valuation metric for a company, calculated by dividing its current share price by its per-share earnings.

Net Income

The total profit of a business after all expenses, including taxes and operating costs, are subtracted from total revenues.