Which Statement Is Describes a General Disadvantage of Going Public

question 26

Multiple Choice

Which statement is describes a general disadvantage of going public?

• A) It facilitates stockholder diversification.
• B) It increases the liquidity of the firm's stock.
• C) It establishes a market value for the firm.
• D) It makes it easier for owner-managers to engage in profitable self-dealings.

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Definitions:

Equivalent Interest Rate

An equivalent interest rate is the interest rate that equates to the compound interest over a different payment frequency, ensuring comparability among rates with different compounding periods.

Nearest 0.01%

Rounding off a number to the closest one-hundredth of a percent for precision in calculation or representation.

Nearest 0.01%

Adjusting values to ensure that they are as close as possible to an accurate hundredth of a percentage point for increased accuracy.

Nearest 0.01%

The approximation of a value rounded to the nearest hundredth of a percent to increase precision.