1. Division Sales Are Treated as Direct Shareholder Cash-Flow Events
Curriculum location: Equity Instrument Features, basic ownership rights, p. 6.
"Equity investors are owners with the right to receive any distributions as well as net proceeds from the sale of a division or a full dissolution of the company."
A sale of a division is an issuer-level asset transaction: its consideration is paid to the corporation. Shareholders receive direct cash or replacement shares only if the company separately authorizes a distribution or a distinct share-level transaction provides consideration.
Correct reading: A division sale is an issuer-level asset transaction. Its consideration belongs to the company; shareholders receive direct cash or replacement shares only through a separately authorized distribution or a distinct share-level transaction.
Candidates otherwise risk treating every division sale as an immediate shareholder cash flow.
2. Common Shares Are Called Freely Tradable Regardless of Market Status
Curriculum location: Equity Instrument Features, Common Shares, investor benefits, p. 10.
"These ownership claims allow investors to benefit from any dividends paid and/or growth in a firm’s net asset value, as well as freely buy and sell these claims in the secondary market."
Common shares can be privately held. Private-company securities may be illiquid or legally and contractually restricted, so common-share status alone does not make them freely tradable. The module’s later public/private comparison confirms that liquidity depends on market status.
Correct reading: Publicly listed common shares usually trade in accessible secondary markets; private common shares may be illiquid and subject to transfer restrictions.
Candidates otherwise risk treating instrument type as a guarantee of liquidity when comparing public and private equity.
3. Early-Stage Firms Are Called Ineligible for Any Public Listing
Curriculum location: Publicly Listed versus Private Equity Securities, private equity over the company life cycle, p. 17.
"For example, firms in an early development phase with negative cash flow and little to no revenue are ineligible for a public equity listing and must rely on private capital sources willing to invest in new companies with a high failure rate."
Exchanges use alternative listing standards. Low revenue and negative cash flow can make an early-stage firm less likely to qualify, but they do not create a universal prohibition. The module’s own Practice Problem 3 solution also uses a probabilistic rather than categorical conclusion.
Correct reading: Early-stage firms with negative cash flow and little revenue are often less likely to meet public-listing requirements and therefore commonly rely on private capital; they are not universally ineligible.
Candidates otherwise risk treating a common early-stage financing pattern as a formal exchange-eligibility rule.
Complete Module 1 Errata Index
Scope: Module 1, pp. 3–24 (printed page numbers).
What this review covers. Errors in the printed curriculum that would change a candidate's answer or understanding: wrong numbers, wrong formulas, reversed logic, and statements that contradict the module's own data. It does not list spelling mistakes, equation-numbering slips, or wording that is loose but defensible.
The table below lists all high-value, objectively confirmed curriculum errors covered by this article, including eligible errors in printed Practice Problems and their solutions. Repeated instances of the same defect are consolidated into one row. Import-only defects, question errors not printed in the module source, disputed or reasonably defensible claims, and low-value editorial corrections such as typos or numbering and cross-reference errors are outside scope.
References
- Delaware General Corporation Law: Sale of Assets, Dissolution and Winding Up
- SEC: Private Secondary Markets
- NYSE: Initial Listings
This article is an independent candidate-focused analysis of confirmed errors in the CFA Level I 2027 Curriculum, Volume 5 Equity Investments, Module 1 Equity Instrument Features. It is not an official CFA Institute errata notice, and inclusion here must not be read as CFA Institute confirmation, endorsement, or approval.