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CFA Level I · CFA Level I Exam · Organizational Forms, Corporate Issuer Features, and Ownership

Compared with a privately held corporation, a publicly traded corporation is most likely to:

A publicly traded corporation most likely has shares that trade on an organized exchange. This gives owners liquidity and observable prices. Public firms also face heavier disclosure rules, and their ownership is usually dispersed and separate from management, unlike private firms.

  1. Aface lower regulatory disclosure requirements
  2. Bhave shares that trade on an organized exchangeCorrect
  3. Chave a small number of owners who are usually also managers

Explanation

Public corporations have shares listed on exchanges, which gives liquidity and a transparent market price. They face greater, not lower, disclosure requirements. Small owner groups who also manage the firm are typical of private corporations.

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