Question

Public issue is the most popular method of raising capital these days by entrepreneurs, which involves raising of funds directly from the public through the issue of prospectus. Which of the following is an advantage of raising funds through public issue?

• A. It increases accountability to public shareholders.
• B. It can be used for businesses to grow through acquisitions.
• C. It increases costs in complying with higher level of reporting requirements.
• D. It needs to maintain dividend and profit growth trends.

Hint:

While going public introduces strict regulatory requirements and reduces operational control, it gives companies a liquid currency—publicly traded stock—that can be used to fund strategic acquisitions and drive rapid expansion.

Answer 1

The Correct Option is B