When a company "goes public," only a small amount of investors are allowed to invest in the company. True or False?

A. True

B. False

Answer

The statement that only a small amount of investors can invest in a public company is false. In reality, any investor can purchase shares once the company goes public. Therefore, the given statement is False.

Explanation

When a company “goes public,” it means they are undergoing an initial public offering (IPO), where stock is sold and can be bought by financial investors. This is false that only a small amount of investors are allowed to invest in the company. In fact, a public company's shares are available on the stock exchange to any investor willing to purchase them. The shareholders, which can be a very large and diverse group, vote for a board of directors responsible for making key decisions and overseeing the management of the company. The more shares a shareholder owns, the more votes they are entitled to cast for the board.