Solved Question: Benefits and limitations of Publicly held firms?

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Solved Question:

Benefits and limitations of Publicly held firms?

The assignment is to write a 1,000 word paper on one of the topics listed above. You must use 3 professional sources (no wiki or ~pedias) and follow APA format (title page, running head, citations, references). The 1,000 words are from the body of your text and do not include your references. Please read the syllabus for a more detailed description of the assignment. You may use your text as a source but it will not count toward your 3 source requirement. Your assignment must be posted in the discussion board and the Written Assignments folder.

Answer:

One of the key benefits of a public held firm is the amount of capital that can be raised and used for expansion puposes.Unlike private firms where is a limit on capital funding and hence a limit on the expansion probabilities the public firms have an enormous source of raising capital in the form of bonds,debentures,shares etc.Also the owners and the entity is not one and the same thing in the sense that the physical eistence of the entity is not influenced by the retirement,death,etc of members and the firm is an independent member which can raise capital or can hold investment in its own name,etc.The shares are also freely transferable which is not so in other types of firms.

However condidering the diadvantages of a public firm,privacy and confidentiality is not present under most of the conditions.The companies have to undergo a lot of legal formalities to incorporate which also sometimes creates wastage of time and also reduces flexibility over taking decisions,etc.

 

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