Question

Which of the following statements about the IPO process is FALSE?

A. Companies must form a Board of Directors to represent investor
interests.
B. Companies must seek out private investors for the company.
C. Companies must figure out how much money they want to raise.
D. Companies must come up with a ticker symbol.

Answer 1

B. Companies must seek out private investors for the company.

Step-by-step explanation:

IPO, in finance, is an acronym that stands for Initial Public Offering. When a private company wants to sell their stocks on the stock market, they go through the IPO process, meaning that they offer shares to the public in a new stock issuance. The IPO process allows the company to raise capital from public investors, not private investors. Companies going through the IPO process have to form a Board of Directors, establish how much money they want to raise, and come up with a ticker symbol. But they don´t have to seek out private investors for the company.