Question

Watch the video on issuing stock for a private corporation. It is a simpler process than...

Watch the video on issuing stock for a private corporation. It is a simpler process than for a publicly traded corporation. Considering this and other factors, will the capital structure be different for a private corporation?

Issuing Stock

laughlinusa /Published on Dec 3, 2012

https://www.youtube.com/watch?v=c0ym_-Q4nRc

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Answer #1

Issueing stock is easier for a private corporation due to lesser legal formalities involved. The stocks should be issued to a real person. The shares of a private corporation are also not traded on the stock exchange. The number of shareholders of a private corporation are limited and hence it can issue limited capital. The rest has to be raised by debt and hence the capital structure will be different.

A public corporation can raise a large amount of stock and hence it can have greater stock and lesser debt.

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