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CFA Level I · CFA Level I Exam · Investors and Other Stakeholders

Compared with a privately held company, a publicly listed company is most likely to face:

A publicly listed company most likely faces greater disclosure and regulatory reporting requirements. In exchange it gains wider access to equity capital and more liquid shares, so options suggesting fewer capital sources or less liquidity describe private companies rather than listed ones.

  1. Agreater disclosure and regulatory reporting requirementsCorrect
  2. Bfewer sources of external equity capital
  3. Cless liquidity in its ownership shares

Explanation

Listing gives access to broad capital markets and greater share liquidity, but in return the company must meet extensive disclosure, reporting and listing requirements. The other two options describe the opposite of what listing provides.

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