Question

The disadvantages of going public include which of the? following?

Answer 1

Cost of Reporting: Must file numerous reports.
-Disclosure:
Operating data must be disclosed.
Officers must disclose holdings.
Special "deals" to insiders will be more difficult to undertake.
-Inactive Market/Low price: A small new issue may not be actively traded, so market-determined price may not reflect true value.
-Control: Managers of publicly owned firms must be concerned about maintaining control to avoid possibly tender offers and proxy fights
-Investor relations
1.Must keep investors abreast of current developments.
2.Managing investor relations is time-consuming.

Laborious decision making process
Reporting costs will go high
Soaring upfront cost
Augments liability

Thanks