Private & Public Company November 29, 2023 Contents Results - #1. What is the main difference between a private and a public company? Size of the company Size of the company Ownership and trading of shares Ownership and trading of shares Number of employees Number of employees Type of products sold Type of products sold #2. In a private company, who typically owns the majority of shares? General public General public Government Government Founders and a small group of investors Founders and a small group of investors Board of Directors Board of Directors #3. What is one advantage of being a public company? Greater control for founders Greater control for founders Limited access to capital Limited access to capital Enhanced liquidity for shareholders Enhanced liquidity for shareholders Exemption from government regulations Exemption from government regulations #4. What regulatory body oversees public companies in the United States? SEC (Securities and Exchange Commission) SEC (Securities and Exchange Commission) FDA (Food and Drug Administration) FDA (Food and Drug Administration) IRS (Internal Revenue Service) IRS (Internal Revenue Service) FTC (Federal Trade Commission) FTC (Federal Trade Commission) #5. Which financial document is required for a public company but not necessarily for a private company? Income statement Income statement Balance sheet Balance sheet Annual report Annual report Business plan Business plan #6. What is an IPO? International Public Offering International Public Offering Initial Private Offering Initial Private Offering Initial Public Offering Initial Public Offering Investor Protection Order Investor Protection Order #7. Which of the following statements is true for a private company? Shares are traded on the stock exchange Shares are traded on the stock exchange Ownership is limited to a small group of investors Ownership is limited to a small group of investors Financial information is publicly disclosed Financial information is publicly disclosed Governed by the SEC regulations Governed by the SEC regulations #8. What is the minimum number of shareholders required for a company to go public? 5 5 10 10 20 20 There is no minimum requirement There is no minimum requirement #9. Which type of company is more likely to face strict regulatory requirements? Private company Private company Public company Public company Both face the same level of regulation Both face the same level of regulation Regulation depends on the industry Regulation depends on the industry #10. What is the typical size of ownership in a private company? Large number of shareholders Large number of shareholders Small number of shareholders Small number of shareholders Ownership is not relevant in private companies Ownership is not relevant in private companies Ownership is determined by government regulations Ownership is determined by government regulations #11. In a public company, who elects the board of directors? Founders Founders Shareholders Shareholders Government Government Employees Employees #12. Which of the following is a disadvantage of being a public company? Limited access to capital Limited access to capital Enhanced liquidity for shareholders Enhanced liquidity for shareholders Stricter regulatory requirements Stricter regulatory requirements Less transparency in financial reporting Less transparency in financial reporting #13. What is the primary source of funding for a private company? Selling shares on the stock market Selling shares on the stock market Government grants Government grants Bank loans and private investors Bank loans and private investors IPO proceeds IPO proceeds #14. Which of the following is true for a public company's shares? Limited availability to the general public Limited availability to the general public Can be freely bought and sold on the stock exchange Can be freely bought and sold on the stock exchange Restricted to employees only Restricted to employees only Cannot be traded once issued Cannot be traded once issued #15. What is a prospectus in the context of going public? A financial statement for private companies A financial statement for private companies A document outlining the company's plans and financial details for potential investors A document outlining the company's plans and financial details for potential investors A report on the company's compliance with government regulations A report on the company's compliance with government regulations A legal document required for private company registration A legal document required for private company registration #16. Which type of company is more flexible in decision-making due to fewer regulatory requirements? Private company Private company Public company Public company Both have the same level of flexibility Both have the same level of flexibility Flexibility depends on the industry Flexibility depends on the industry #17. What is the typical level of disclosure for a private company? Full disclosure of financial information Full disclosure of financial information Limited disclosure to a small group of investors Limited disclosure to a small group of investors No disclosure required No disclosure required Disclosure determined by government regulations Disclosure determined by government regulations #18. Which market is associated with the trading of public company shares? Private market Private market Secondary market Secondary market Primary market Primary market Both A and C Both A and C #19. What is the role of a registrar in the context of public companies? Manages employee relations Manages employee relations Manages shareholder records and transactions Manages shareholder records and transactions Oversees product development Oversees product development Conducts financial audits Conducts financial audits #20. Which of the following is a reason a company might choose to remain private? Access to greater capital Access to greater capital Reduced regulatory scrutiny Reduced regulatory scrutiny Enhanced liquidity for shareholders Enhanced liquidity for shareholders Increased control for founders Increased control for founders Finish