Which of the following statements is false?
A) When a corporation's shares are owned by a few individuals who are associated with or are the firm's management, we say that the stock is "closely held."
B) A publicly owned corporation is simply a company whose shares are held by the investing public, which may include other corporations and institutions as well as individuals.
C) Going public establishes a true market value for the firm and ensures that a liquid market will always exist for the firm's shares.
D) 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.
E) 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 true market value for the firm, as the value of the shares can still be influenced by various external factors and market conditions. Additionally, while going public can create a liquid market for the firm's shares, it does not guarantee it will always exist.

Which of the Following Statements Is False