Question

10. A series of steps is involved in selling shares to the public. Specify the steps in chronological order starting from Stage 1, 2, 3, and 4.

A. Pricing, marketing shares, preparation of the documents, evaluation of costs and benefits of going public.

B. Evaluation of costs and benefits of going public, preparation of the documents, marketing shares, pricing.

C. Evaluation of costs and benefits of going public, pricing, preparation of the documents, marketing shares.

D. Marketing shares, evaluation of costs and benefits of going public, preparation of the documents and pricing.

11. What is the main motivation for private companies to become public?

A. Establish precise value of a firm

B. Raise new capital for growth

C. Increase recognition

D. Use new capital to repay debt

Answer 1

10) B. Evaluation of costs and benefits of going public, preparation of the documents, marketing shares, pricing.

Stage 1 - Evaluation of costs and benefits of going public : This is the primary and important exercisr, as the same will decide, whether to go public or not.

Stage 2 - Preparation of the documents : The second stage comes where all the statutory and company documents are prepared.

Stage 3 - Marketing shares: In this stage, shares are marketed to determine the value and create awareness among public.

Stage 4 - Pricing: At last, the pricing is decided using appropriate method.