Which of the following examples describes a publicly held corporation?
To identify which of the examples describes a publicly held corporation, you need to understand the characteristics of such a corporation and evaluate the options provided.
A publicly held corporation is a company that has issued shares of stock to the general public, which means anyone can buy and trade those shares on a stock exchange, such as the New York Stock Exchange (NYSE) or the NASDAQ. Publicly held corporations are owned by shareholders who invest in the company and have the potential to earn profits through dividends and capital gains.
Now, let's evaluate the provided examples to find the correct one:
Option 1: "XYZ Corp. has issued shares of stock and is listed on the NASDAQ."
This option states that XYZ Corp has issued shares of stock and is listed on a stock exchange, specifically the NASDAQ. Being listed on a stock exchange is a crucial characteristic of a publicly held corporation, as it allows for the public trading of its shares. Therefore, this option describes a publicly held corporation.
Option 2: "ABC Corp. is owned by a single individual and is not traded on any stock exchange."
This option states that ABC Corp is owned by a single individual and is not traded on any stock exchange. As mentioned earlier, for a corporation to be considered publicly held, its shares must be traded on a stock exchange, enabling public ownership. Since Option 2 does not meet this requirement, it does not describe a publicly held corporation.
Based on the evaluation above, Option 1 is the example that describes a publicly held corporation, as it fulfills the key characteristic of being listed on a stock exchange, namely the NASDAQ.