Valuation of Common Stock - Assignment Example

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Summary

"Valuation of Common Stock" paper argues that the advantages are more potential investors, better personnel, promotion of the company, greater acquisitions, and ease of selling interests by officers and directors. Citrus Glow International would be able to contact more potential investors…

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Subject: Finance & Accounting
Type: Assignment
Level: Masters
Pages: 3 (750 words)
Downloads: 4
Author: rohanliliane

Extract of sample "Valuation of Common Stock"

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Stock options have the potential to substantially gain in value. In addition, generally, the personnel will not have to invest as much of their own money in the company (The Advantages and Disadvantages of Going Public online).Also, Citrus Glow International will promote the company. In general, publicly-traded businesses are more widely known than non-publicly traded businesses. The business gains publicity and an image of stability through trading publicly (The Advantages and Disadvantages of Going Public online).

Going public requires a time commitment in setup and in statutory compliance. In addition, it will take the business owners' and managers' attention away from the everyday management of the company (The Advantages and Disadvantages of Going Public online).Also, going public requires money. The business will need to pay for the time spent on compliance. In addition, the business will need to pay legal counsel when setting up and maintaining the public offering (The Advantages and Disadvantages of Going Public online).

Moreover, there are many new legal obligations. These include keeping stock owners informed about business operations, management, legal issues, financial standing, and business costs. Company time and money will be spent dealing with these and additional compliance issues (The Advantages and Disadvantages of Going Public online).Liability issues may arise if the business does not comply (The Advantages and Disadvantages of Going Public online).Lastly, gaining public shareholders may reduce a business owner's control over the company.

This is especially true if shareholders are given approval power over business actions (The Advantages and Disadvantages of Going Public online).I agree with Lisa and Joe that Citrus Glow International needs to stay ahead of the game with competitors coming up with substitute products and hence the need to issue IPO. I do not agree with Dan that Citrus Glow International outsources production and concentrates on its marketing efforts.

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