IPO Share Allocation
Case Study Analysis Solutions
An initial public offering (IPO) is the first in units or shares of a company sale. IPOs are often issued by smaller companies, young people seeking capital to expand, but can also be done by large private companies looking to become publicly traded. When a company’s shares in the public market, often issue additional new shares at the same time. The money paid by investors for the newly issued shares goes directly to the company (Operations against subsequent titles on the market, where the money passes between investors). Therefore, the IPO gives the company access to a large group of equity investors that can provide significant capital for future growth. Instead the company to repay the capital, the new shareholders have a right to future profits distributed by the company and the right to a capital distribution on winding. Once the company is listed, you can follow the share issue, which again provide capital for expansion without debt. This ability to constantly raise large amounts of capital in the market in general is important for many companies looking to list incentive. Other public interest will also provide liquidity for investors in venture capital, management and employees, which generally have options to purchase shares. In addition, through an initial public offering, the company wins prestigious worldwide with customers, suppliers, and within their communities and local businesses.
Claire Magat Raffaelli
Date Posted: February 17, 2010. Prod #: E377-PDF-ENG
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