Financial Management: Theory & Practice
Financial Management: Theory & Practice
16th Edition
ISBN: 9781337909730
Author: Brigham
Publisher: Cengage
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Chapter 18, Problem 2Q
Summary Introduction

To determine: The reason due to which firms decide to opt for public issue.

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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?
Which 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 performance
If a person inherited $100,000 and decided to buy stock in a new venture through a private placement, how would Regulation D affect this investor?   How has crowdfunding changed the landscape of new-venture financing?   Some entrepreneurs do not like to seek new-venture financing because they feel that venture capitalists are greedy. In your opinion, is this true? Do these capitalists want too much?
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