Question

Jazztel is the british company which became a leading provider of data transmission services and telecommunications in Spain with its own infrastructure.

To launching an IPO on the Madrid Bolsa, outline the financing options available to Jazztel. Disscuss the pros and cons of these option ?

Answer 1

Following are the pros and cons of launching an IPO option on Madrid Bolsa:-

Pros:-

1) IPO allows a company to get its company listed on the stock exchange.

2) It allows company to get lot of capital if they are in need of the same for expansion.

3) It does not have any fixed repayment cycle like bank loans or overdrafts.

4) Goodwill of the company can increase because of the same.

Cons:-

1) The IPO process requires a lot of work. It can distract the company leaders from their business.

2) Business owners could lose their ownership control because they may not have the ultimate powers because, BOD may have powers.

3) They may face intense scrutiny from the regulators and have to adhere to lot of acts and regulations.