Which of the following statements is NOT true?
A)When a corporation's shares are owned by a few individuals who own most of the stock or are part of the firm's management, we say that the firm is "closely, or privately, held."
B)"Going public" establishes a firm's true intrinsic value and ensures that a 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)It is possible for a firm to go public and yet not raise any additional new capital.

Question

Quizplus · Accepted Answer

Going public does not necessarily establish a firm's true intrinsic value. The value of a publicly traded firm's stock can be influenced by a variety of factors, including market sentiment, news events, and investor perceptions, which may not necessarily reflect the true intrinsic value of the firm. Additionally, while going public enables a firm to tap into a wider pool of potential investors and provides liquidity for existing shareholders, it does not necessarily ensure that a liquid market will always exist for the firm's shares.

Which of the Following Statements Is NOT True