Question

Which of the following statements is NOT CORRECT?

	a.	When a corporation's shares are owned by a few individuals, we say that the firm is "closely, or privately, held."
	b.	When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market.
	c.	It is possible for a firm to go public and yet not raise any additional new capital for the firm itself.
	d.	The stock of publicly owned companies must generally be registered with and reported to a regulatory agency such as the SEC.
	e.	"Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares.

Answer 1

Answer is e. e is Not Correct

	a.	When a corporation's shares are owned by a few individuals, we say that the firm is "closely, or privately, held." Correct
	b.	When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market. Correct
	c.	It is possible for a firm to go public and yet not raise any additional new capital for the firm itself. Correct. This can be done when existing shareholders sell their holdings (part / full) to public
	d.	The stock of publicly owned companies must generally be registered with and reported to a regulatory agency such as the SEC. Correct
	e.	"Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares. Incorrect. Going public does not ensure liquid market will always exist for firm's share nor does it establishes a firm's true intrinsic value. It is just traded at fair value.