Question

What factors would a company going public take into consideration when deciding on which stock exchange to list? Provide your own examples and also answer the following questions: Why is Tesla listed on NASDAQ while most all other car companies are listed on NYSE? In addition, if the start-up Goldieblox went public, which exchange would you recommend for the company?

Answer 1

Factors to consider while listing on stock exchange :

1. The company has to consider to if the company wants to issue bonds or stocks ,since bonds involve fixed finance costs and stocks have a unlimited life until winding up of the company.

2. Second ,it has to choose the stock exchange that it wants to list the company on and the rules and regulations involved with the stock exchange that it has decided to list on.

3. Thirdly,it has to look at the costs involved in going public such as underwriting commission, lead book runners and the like . If the costs of going public outweigh the benefits of stock issue then the listing should not be considered.

4. The company also has to conisder the non financial benefits of listing such as valuation or liquidity in the long run.