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____ 46. Which of the following statements is NOT CORRECT? a. When a corporation's shares are owned by a few individuals and are not traded
____ 46. 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 unew capital at the time.
32. Which of the following statements is CORRECT?
a. Corporations are at a disadvantage relative to partnerships because they have to file more reports to state and federal agencies, including the Securities and Exchange Administration, even if they are not publicly owned.
b. In a regular partnership, liability for the firm's debts is limited to the amount a particular partner has invested in the business.
c. A fast-growth company would be more likely to set up as a partnership for its business organization than would a slow-growth company.
d. Partnerships have difficulty attracting capital in part because of their unlimited liability, the lack of impermanence of the organization, and difficulty in transferring ownership.
e. A major disadvantage of a partnership relative to a corporation as a form of business organization is the high cost and practical difficulty of its formation.
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