About 10 years ago you founded an energy company that operates as a privately-held corporation with only limited stock ownership. You are considering selling stock to the public for the first time through an initial public offering. All of the following are disadvantages for taking a company public except:

a. going public is costly.

b. financial reports would have to be made available to the public.

c. you would get an influx of cash that doesn't have to be paid back.

d. you would be responsible to shareholders who would expect favorable short-term performance.

Question

Chang

Business

1 June, 18:55

About 10 years ago you founded an energy company that operates as a privately-held corporation with only limited stock ownership. You are considering selling stock to the public for the first time through an initial public offering. All of the following are disadvantages for taking a company public except:

a. going public is costly.

b. financial reports would have to be made available to the public.

c. you would get an influx of cash that doesn't have to be paid back.

d. you would be responsible to shareholders who would expect favorable short-term performance.

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Answers (1)

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Alisa · Answer 1

you would get an influx of cash that doesn't have to be paid back.

Explanation:

Initial public offering of a companie's shares is opening the purchase of company shares to the general public. This gains more funds for the company to run its operations and better make profit.

One major advantage of going public with an IPO is that it provides an influx of cash that does not need to be paid back.

When cash is obtained from sale of shares to the public it is not paid back to shareholders.

If shareholders want to get their money back they will sell the shares on the secondary market to others that want to buy the company shares.