A decision of a privately held company to go public

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A decision of a privately held company to go public

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How do you think each of the following items would affect a company’s ability to attract new capital and the flotation costs involved in doing so?
a. A decision of a privately held company to go public

 

Explanation & AnswerSolution by a verified expert

Explanation

Private company while going public lists its securities on a trading platform having a large number of investors. The trading platform will help the company in getting easy and favourable access to equity capital in the market and that also helps to decrease the flotation cost.

Verified Answer

Going public will improve the company's ability to attract new capital and decrease the floatation cost.

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