ENTREPRENEURSHIP

ENTREPRENEURSHIP AND THE GLOBAL ECONOMY

INTERNATIONALIZATION OF ENTREPRENEURSHIP

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which is NOT an advantage of an IPO?
A
Improved financial condition
B
Access to more capital
C
Diversification of shareholder base
D
Good privacy
Explanation: 

Detailed explanation-1: -One major disadvantage of an IPO is founders may lose control of their company. While there are ways to ensure founders retain the majority of the decision-making power in the company, once a company is public, the leadership needs to keep the public happy, even if other shareholders do not have voting power.

Detailed explanation-2: -However, going public can also have its drawbacks, including increased regulatory requirements, loss of privacy and control, and higher costs associated with being a public company. Additionally, there is also the risk that the stock price may decline after the IPO, causing a loss of value for investors.

Detailed explanation-3: -One advantage of a company going public through an IPO is the ability to raise substantial capital now and in the future on public capital markets when SEC registration filings, including shelf offerings, become effective.

Detailed explanation-4: -In conclusion, IPOs have both advantages and disadvantages. On the one hand, they can provide a valuable source of capital for companies and enable them to expand. On the other hand, they can be costly and risky, and there is no guarantee that a company’s stock price will rise after the offering.

There is 1 question to complete.