Financial Management: Theory & Practice
16th Edition
ISBN: 9781337909730
Author: Brigham
Publisher: Cengage
expand_more
expand_more
format_list_bulleted
Question
Chapter 18, Problem 2Q
Summary Introduction
To determine: The reason due to which firms decide to opt for public issue.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Many companies that go public with an IPO don’t actually need additional cashto continue growing their operations. Why might such a firm decide to go public?
Why would so many people invest in a company like AFCO? What could investors have done to prevent themselves from falling into investment schemes such as this?
Which of the following is an incentive for firms to conduct an IPO?
Underwriter and advisor fees are typically substantial.
Venture capitalists will be more able to sell their shares.
Reporting requirements are more stringent for public companies.
The company may become subject to a hostile takeover.
Chapter 18 Solutions
Financial Management: Theory & Practice
Ch. 18 - Prob. 1QCh. 18 - Prob. 2QCh. 18 - Prob. 3QCh. 18 - Prob. 4QCh. 18 - Prob. 5QCh. 18 - Prob. 1PCh. 18 - Prob. 2PCh. 18 - Prob. 3PCh. 18 - Bynum and Crumpton, a small jewelry manufacturer,...Ch. 18 - Prob. 5P
Ch. 18 - Prob. 6SPCh. 18 - Prob. 1MCCh. 18 - Prob. 2MCCh. 18 - Prob. 3MCCh. 18 - Prob. 4MCCh. 18 - Randy’s, a family-owned restaurant chain operating...Ch. 18 - Prob. 6MCCh. 18 - Prob. 7MCCh. 18 - Prob. 8MCCh. 18 - Prob. 9MCCh. 18 - Randy’s, a family-owned restaurant chain operating...Ch. 18 - Randys, a family-owned restaurant chain operating...Ch. 18 - Randy’s, a family-owned restaurant chain operating...Ch. 18 - Randy’s, a family-owned restaurant chain operating...Ch. 18 - Prob. 14MCCh. 18 - Prob. 15MCCh. 18 - Randys, a family-owned restaurant chain operating...Ch. 18 - Prob. 17MC
Knowledge Booster
Similar questions
- Why investors are willing to invest in high-tech firms instead of conventional financial sources?arrow_forwardWhat are the basic arguments for increasing capital requirements at large commercial banks? In what ways will depositors, stockholders, and society in general benefit? How might each group be disadvantaged? As commercial banks enter new lines of business such as brokerage, how much additional capital should be required? Should these new lines of business be insured by the FDIC? Why or why not? Give examples from today’s financial marketplace.arrow_forwardSuppose you need additional capital to expand,and you sell some stock to outside investors. If youmaintain enough stock to control the company,what type of agency conflict might occur?arrow_forward
- • When looking to invest corporate dollars, is the top-down approach is preferred over the bottom-up approach? Why or why not?arrow_forwardWhich of the following statements is NOT true about Initial Public Offerings? A. An IPO occurs when a private company sells stock to the public for the first timeB. IPOs are less risky than a typical stock market investment since they are typically smaller companiesC. When an IPO occurs, a company raises money from public investors that they use to grow their businessD. IPOs are risky investments since the company going public often has a limited track record of performancearrow_forwardWhich of the following is not a financing decision? A Should the firm borrow money from a bank or sell bonds? B Should the firm shut down an unprofitable factory? C Should the firm buy or lease a new machine that it is committed to acquiring? D Should the firm issue preferred stock or common stock?arrow_forward
- What is meant by the goal of maximization of shareholder wealth? The government has passed regulations that require pollution controls, development restrictions, and pay equity over the years. But, can a firm still achieve the maximization of shareholder wealth? How?arrow_forwardWhy would it be desirable to switch from an S corporation to C corporation once the business is growing fast?arrow_forwardIn times of crisis companies are often seen to be paying stable dividends. The question however is, should companies retain these dividends in the firm to protect employment and investments? Should companies preserve their financial flexibility in times of financial crises? Discuss the ethics of dividends and illustrate how dividends and related issues (e.g. dividend taxation) can play a part in rethinking the capitalist paradigm.arrow_forward
- Carrington and Genevieve agree that they would like to try to increase the value of the company stock. Like many small business owners, they want to retain control of the company and do not want to sell stock to outside investors. They also feel that the company's debt is at a manageable level and do not want to borrow more money. What steps can they take to increase the price of the stock? Are there any conditions under which this strategy would not increase the stock price?arrow_forwardExamine the reasons as to why investment banks achieve high levels profits and why large profits cause controversy with the public? Explain.arrow_forwardYou are analyzing a startup company. Of course, it has a negative operating cash flow early on. But as you further analyze the company, what must you consider? Select an answer: Having a negative operating cash flow is fine if it is offset by investing activities. A negative operating cash flow is not a concern if the company has a significant amount of loans. A negative operating cash flow for a startup business is expected in the long-term. Having a negative operating cash flow is not sustainable in the long-term.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning