Which of the following statements is NOT CORRECT?
A) When a corporation's shares are owned by a few individuals and are not traded on public markets, we say that the firm is "closely, or
Privately, held."
B) "Going public" establishes a firm's true intrinsic value, and it also insures that a highly liquid market will always exist for the
Firm's shares.
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) Publicly owned companies have shares owned by investors who are not associated with management, and public companies must register with
And report to a regulatory agency such as the SEC.
E) It is possible for a firm to go public and yet not raise any
Additional new capital at the time.

Question

Quizplus · Accepted Answer

Going public does not necessarily establish a firm's true intrinsic value, and while it creates a highly liquid market for the firm's shares, it does not insure this liquidity will always exist. The intrinsic value of the firm's shares will be determined by the opinions of investors in the market, and this value may fluctuate over time.

Which of the Following Statements Is NOT CORRECT