The advantages of going public include which of the following? (Select all that apply.)

The advantages of going public include which of the following? (Select all that apply.)

A. One advantage of going public is increased liquidity. It is easier to buy and sell the company’s shares.

B. A very significant advantage of going public is that by doing so a firm can satisfy all of the requirements of being a public company such as SEC filings and listing requirements of the securities exchanges.

C. Increased access to capital markets is a primary advantage of going public.

D. Decreased exposure to sources of capital is another advantage of going public.

Answer: The correct options are (A) and (C).

Offering shares on a stock exchange gives the benefit to a company in the following ways. Another advantage is its greater pleasure because they can easily access what they would have struggled to purchase if they had limited liquidity (A). It is easier to purchase and dispose of public limited company shares after going for an IPO as compared to privately limited company shares. This Liquid physique is the most beneficial to the stock mainly because flippers can easily unload their stocks, and thus may bring in more demand and value. More critically, going public provides a firm better opportunity to access both domestic and international capital markets (C). Its offer of the company’s shares allows it to borrow large amounts of capital from a vast network of investors more than it would be able to get from a private source or a banking institution. This capital can be used for, expansion or research and development, paying off high-interest debt or acquisitions.

Nevertheless, option (B) of the present list does not correspond to the example. Despite such filings and listings in the SEC as well as meeting the exchange listing requirements are considered as formalities of going public; they are costs rather than benefits. These include time constraints, both in terms of time taken to complete the requirements and the large amount of time firms are committed to spending on these tasks, costs, and the numerous and continually evolving obligations that many firms complain are negative aspects of SOX compliance. Like option (D), this statement is also False since going public expands the company’s access and control to capital sources by floating the shares in the stock market for institutions as well as individual investors.