Week 5 Finance Essay

Submitted By ahlyndia05
Words: 547
Pages: 3


Going public is a decision companies face daily. It is not about offering stock to those that choose to invest; but it’s an advertisement that the company has made it. Obtaining an initial public offer or IPO is the ultimate goal. It provides access to capital growth, it shows the ability to expand into a variation of markets, and opens doors to prospective business partners. It is the official public “stamp of approval” declaring the success of the business that has worked so hard to be developed as well succeed.
With any business opportunity a firm is presented with there are risks, pricing issues, laws that must be abided by, and roles that everyone must play in order for the IPO to be a success. Before any of that can be discussed; understanding what an IPO is must be understood by a consumer, an investor, and most importantly the owner of the business.
An IPO is the first sale of stock by a company to the public. (direct quote). Having an IPO allows the business to expand opportunity to the public to purchase stock on the stock exchange. This is different from private companies. There is no one stating that you cannot purchase anything associated to the company that may in turn increase your wealth. That is why there are risk, regulations, and roles that owners must ensure are covered in order for an IPO to be a success.
References to Introduction: http://www.investopedia.com/university/ipo/ipo.asp http://www.inc.com/guides/preparing-for-initial-public-offering.html

Bullet Point 5:
Going public opens the doors to foreign exchange. In foreign exchange there are high risks, but there are ways to alleviate those risks. There are some countries that with weak legal institutions, less economic freedom, or shaky corporate governance. Weak legal institutions don’t work effectively. It presents too many opportunities for failure resulting in the loss of funds associated with the investor as well as the company losing money it was expecting. A business can enforce a contract that would prevent bribes from being allowed guaranteeing a secure investment. Of course contracts can be negotiated at the beginning of each fiscal year the firm has.
There are many foreign countries that are