The Perks Of Public Ownership

As the PODS business grew, they owners saw that they needed to expand their business approach and decided to become a private corporation. With becoming a private corporation, it provided more protection over the owners of the business. It provided limited liability which means that their personal finances are no longer at stake if the business owes debt. A private corporation has private stock, which means that no one outside the business can buy stock in that business. This still give the owners control over what happens in the business. “…A small group of individuals maintains control over much of the general corporate operations” (Ferrell, O.C., Hirt, G.A, & Ferrell, L., 2014). It also provides stockholder loyalty and the business is less

Advantages- Less liability for stakeholders. Ability to raise funds/capital in the form of stocks as needed.

An advantage of being a public limited company is having limited liability because of only being responsible to amount invested into Tesco PLC. Another advantage of a public limited company is being able to liquidate. This is when shares are bought or sold to shareholders if on the stock exchange it’s quoted. An additional advantage of a public limited company is the share value as Tesco PLC’s value will be shown by the market capitalisation from being the share price being what it’s based on. An extra advantage of a public limited company is having better access to capital because of the existing and new investor are raising share capital.

Downsides to being a public limited company is that there will be greater access to the company’s financial performance and actions which loses abut of the businesses privacy. The value of the company will be determined by financial markets through the trading of the company’s shares.

Assume that you are a CEO of a medium-sized company that needs a significant influx of cash for several expansion projects. As the CEO, you must determine whether your company should remain private or go public. Some companies postpone going public due to the unpredictability of economic and market conditions. Consider the ramifications of both alternatives. Construct an argument for and against going public. Before providing your response, review the guidelines and regulations associated with going public by visiting Small Business and the SEC located at http://www.sec.gov/info/smallbus/qasbsec.htm.

McBride Financial Services, for instance, can raise capital by doing an IPO. This gives the company an opportunity to expand its business by becoming a part of the stock market and hence becoming well-known. This also provides enough funds to be put back into the company for profit, and for any other expenses necessary to remain successful and in existence. In the case of an acquisition, which is the taking over of another company, McBride will benefit because the company being acquired is already established. It takes less investment, time, and energy than to start-up a new company. A merger also can be a beneficial opportunity for

It is pretty simple why companies’ do choose to go public. “Companies go public usually to have access to more money” (Martin, 2017). Companies have two ways they can increase funding. They can sell bonds or sell shares. Although when it comes to selling bonds a company has to remember that they still have to pay interest on the money they have borrowed and pay it all back (Martin, 2017). This is why the majority of companies chose to raise the money by selling shares instead. Companies want more money for new investments, new innovations, and to be able to build up their savings too. Plus, companies need more money for when they start new projects.

Publicly held companies are not successful by chance. They have to utilize systems that will determine their future and identify potential financial risks, be they environmental or by fellow competitors. The company will focus on five areas of concern that will lead the public to a better understanding of its goals and areas that need improvement. It will make public by means of an organizational statement an outline detailing its purpose as well as general guidelines for accomplishing it. The company will then reveal (with concrete evidence

* Capital raised in an IPO can be used to pay off debt and thus reduce the interest costs and enhance the company’s debt to equity ratio

Finally, this process can reduce liquidity risk and investment risk. In addition, make the capital market more efficiency.

Ten years later, the business becomes a countrywide company and there are currently 70 shareholders. Thus, an unlisted public company was achieved at this stage . The Board of Directors would like to change the entity structure from the ambition of penetrating into new markets and raising more funds. They decided to write down possible issues to be listed on the Australian Securities Exchange.

Therefore, these concerns can only be handled after the company decides on the offering structure, which defines investor’s demographic and a precise stock exchange to list on. Afterward, the company and its underwriters must begin to prepare the required documentation for both potential investors and regulators. The main documents are registration statements and a prospectus which contains all the financial and non-financial information that potential investors require in order to make the investment decision. In most countries, the contents of the prospectus must be approved by the local securities regulators before it can be distributed to potential buyers. (Bodie et al. 2005,

Q1. What are the built-in tensions with a public private equity firm? How does Blackstone 's structure attempt to reconcile them?

Firstly, a barrier in trying to implement freedom and autonomy coupled with possessing employees with intrinsic motivation is not only the lack of talent but finding talent with the required characteristics. Secondly, extensive employee benefits such as a gym, day-care and the absence of commission-based pay for its account representatives would most likely not been possible if a company is public. Thirdly, a lack of explicit support and encouragement from top management would be another barrier as this is important for the promotion of an egalitarian culture based on trust and mutual respect on top of a family-friendly atmosphere.

Second, I will discuss any issues involved related to raising capital in the global market. When a company decides to enter the global market, it is up to management to ensure that the company is ready for such move. When raising capital in the global market, companies may have to deal with global credit facilities. Before global credit facilities decide to do business with a company, the company must first prove that the standing of the company is healthy. The company must be able to show the global credit facilities that the company’s overall financial performance is healthy and in some instances that the financial strength of the parent company is healthy as well. A common issue that a lot of companies wishing to raise capital in the global market may come across is the preparation of financial statements. Financial statements preparation varies from country to country and can be very difficult for some countries to understand or read