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Can someone please tell me the advantages of listing on a Stock Exchange??? (top points given)?


From the following options:

a) The company can be more profitable

b) The company can more easily raise additional equity capital

c) The company has lower reporting requirements because it doesn't need to tell a business angel what it is doing

d) Investors are offered liquidity and maturity transformation

e) The company can more easily access debt capital

Any help will be appreciated

this is the question i am asked about in my homework so i have to pick one out of the lot, but the looks of it your pointing towards the first half of (d) so i suppose (d) it is

A, B, C, and E are just plain incorrect. D was correct until you mentioned "Maturity Transformation (what is that? Death? Wrinkles?)

To list on a stock exchange, you have to go public. You can't just fill out a form & start selling stocks. It is a $100,000 minimum cost to go public.

A) Profitability - has nothing to do if you are public or not.
B) Easily Raise Capital - It is never easy, public or not
C)Lower Reporting Requirement - You have much more reporting requirements, audited and public.
D)Investors Do have more liquidity
E)Debt Capital - Raising capital is never easy.

Being on a stock exchange does two things - increases awareness of your company, and increases investor liquidity. You still need a decent company first.

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