INTERMEDIATE FINAN.MGMT.(LL)-W/MINDTAP
14th Edition
ISBN: 9780357533611
Author: Brigham
Publisher: CENGAGE L
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Question
Chapter 18, Problem 4MC
Summary Introduction
Case summary:
Restaurant R, a family-owned restaurant chain based in Country A, has grown to the point where it is feasible to expand across the entire Southeast. The planned expansion would allow the company to raise new capital of approximately $18.3 million. The family would like to sell common stock to the public to collect the $18.3 million because Restaurant R's already has a debt ratio of 50 percent and because family members already have all their personal wealth invested in the company. The family, however, wants to retain power over voting.
To discuss: The reason why would a company consider going public and its advantages and disadvantages.
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Chapter 18 Solutions
INTERMEDIATE FINAN.MGMT.(LL)-W/MINDTAP
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Similar questions
- What are some reasons why companies decideto go public? If going public is a good idea, whydon’t all companies do so?arrow_forwardWhat types of companies enter the markets for initial public offerings? Why docompanies choose to go public? Why not stay private?arrow_forwardWhat could possibly go wrong while using financial leverage? Do you think it should be utilized by a company at all?arrow_forward
- What do you see as some of the possible problems if shareholder value is seen as a strategy (and not an outcome)?arrow_forwardHow can you tell of a company is profitable?arrow_forwardWhy might a company want to invest in a company rather than buy it outright? Wouldn't they have more say if they bought the company?arrow_forward
- What can you say about the market value of the company? is it positve or is negative?arrow_forwardHow does a hostile takeover affect the company’s stakeholder (shareholders, executives, employees, and society in general)? Is it usually beneficial or detrimental to these stakeholders? Why?arrow_forwardCan a firm maximize its profit if it is only managed to meet shareholders' interests? (Own words please)arrow_forward
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