Modern Art Online is preparing to sell new shares of stock to the general public.As part of this process, the firm just filed the required paperwork with the SEC that contains the material information related to this issue of stock.What is the name associated with this paperwork?

Question

Quizplus · Accepted Answer

The paperwork filed with the SEC that contains material information related to the issue of stock is called a registration statement. Choice A (prospectus) is a document that is part of the registration statement, which provides detailed information about the company and the offering to potential investors. Choice B (red herring) is a preliminary prospectus that is distributed to potential investors but still lacks some key information required in the final prospectus. Choice C (security agreement) is a contract that governs the security interest of a lender in a specific asset. Choice D (comment letter) is a type of correspondence from the SEC that provides feedback on the registration statement, typically requesting additional information or revisions.

Modern Art Online Is Preparing to Sell New Shares of Stock