Question

An Initial Public Offering (IPO) is a major milestone for a company. This is a very expensive and time-consuming process. It does not come without a lot of forethought and judicial weighing of the pros and cons. We will start this conversation by looking at some of the reasons why a company would decide to take the steps to become a publicly traded corporation. What pros and cons have to be weighed?

Answer 1

In private organization they would go publically only, if they are in need of funds to increase their business and develop its price and therefore the significant needed of funds is much high that it cannot be organized via the other supply. Funds will primarily be gathered either via liability or equity. Each of these bases have their specific advantages and disadvantages. Liability could be an inexpensive supply associated to equity, but it generates associate requirement for the deriving object. The most important advantage of associate initial offering is to lift investment for a quantity, which is otherwise terribly tough to rearrange thanks to multiple motives similar to significant of funds, extent of firm itself, and restricted accessible liability.

The key use of investment elevated via initial offering is to take a position the elevated assets into business growth resulting in higher development and stronger bottom

Answer 2

Answer: The answers are provided below

Step-by-step explanation:

Initial public offering is defined as the first sale of stock by a firm. Small companies that are looking to grow their company use an initial public offering as a method to generate the capital needed for expansion.

The advantages are:

1. Raising of capital. This capital can be used for research and development (R&D), capital expenditure, and pay off existing debt.

2. Inccreased public awareness of the company. IPOs generate publicity by making products known to potential customers.

3. Increase in market share of the company.

The disadvantages are:

1. It leads to added disclosure for investors.

2. Public companies are regulated by the Securities Exchange Act, which may be difficult for newer public companies as they must meet the rules and regulations which are monitored by the Securities and Exchange Commission.