9. Initial public offering is: a. a promotion a firm or government has for selli
ID: 424011 • Letter: 9
Question
9. Initial public offering is: a. a promotion a firm or government has for selling securities b. when a company offers stock for sale to the general public for the first time. c another term for secondary market all of these answers are correct d. 10. Virtually all financial decisions involve a trade-off between risk and return. 11. Purchasers of preferred stock are the true owners of a corporation. 12. Accounting is the language of business 13. Risk is defined as the uncertainty of a profit or a loss. 14. Who participates in the financial system? businesses governments b. c. individuals d. all of the above Raphael works as a tax accountant at a mid-sized manufacturing company. Raphael would be considered a a. management consultant b. public accountant 15. management accountant government accountant 16. The procedure used by accountants to convert transactions into financial statements is called a recording financial information processing financial information the accounting cycle 17. The financial system describes the process by which funds flow from savers to users. 18. 19. The market value of a stock is the price at which the stock is currently selling. An owner of which form of stock would receive dividend payments first? a. convertible securities b. common stock c. preferred stock d. standard stock 20. Accountants play a role in all three business activities: financing, investing, and operating.Explanation / Answer
9 B
When a company offers stock for sale to the general public for the first time.
Initial Public Offering also known as IPO Is when any private company raises investment capital by offering its stock for sale at the very first time.
10 Virtually all financial decisions involve a trade-off between risk and return
True
There is always a risk in investment. Either the investment will give profit or loss.
11 Purchasers of preferred stock are the true owners of a corporation
False
The preferred stock holders do not have ownership of the firm and cannot vote. They have right to claim priority than the common stock holders.
12 Accounting is the language of business
True
This is because the financial managers communicate the shareholders, investors, creditor etc in the financial terms like financial and economical condition of the company.
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