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bazaltina [42]
3 years ago
8

IPOs are associated with several puzzles: IPOs are underpriced on average; new issues are highly cyclical; transaction costs of

IPOs are high and long-term performance of IPOs is poor on average.
Why many firms are still choosing to go for an IPO (give at least three possible reasons supporting your answer)?

Why investors choose to buy stocks of IPO firms?
Business
1 answer:
goblinko [34]3 years ago
5 0

Answer:

Explanation:

Firms still choose to go for an IPO for the following reasons;

1. Majorly, it is a means of generating revenue. Revenue is generated when stocks are sold to the public.

2. It is also a means of reducing risk, The cost of running the business is spread across many investors, so is the risk.

3. There is reduction of the overall cost of capital and gives the company a more solid standing when negotiating interest rates with banks.

4. Companies can easily offer up stocks instead of cash in the acquisition of other companies or in the case of mergers.

5. Having stocks listed on NSE is a means of public exposure

Investors choose to buy stocks of IPO firms because the initial offering is usually at a low rate since the firm is still small and relatively unknown. This stocks bought at a cheap rates have the chance of rising thus generating gains for the investors.

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The manufacturing costs of Rosenthal Industries for the first three months of the year follow:
svlad2 [7]

Answer:

variable cost per unit = 46

fixed cost 188680

Explanation:

The high-low method consist in compare each frame to get the variable and fixed components

5440 high

2040 low

3400 difference

437920 high

281520 low

156400 difference

variable cost =15600/3400

variable cost = 46

the reasoning is that the additional 3400 units generated that cost.

Now:

we múltiple by the units by the production and get total variable

46 * 2040 = 93840 total variable

lastly total cost - total variable = fixed

281520 - 93840 = 188680

7 0
3 years ago
héctor manages a plastics factory that manufactures pet chew toys. senior management has decided to change the company’s bonus s
alexgriva [62]

Calling a face-to-face meeting with the employees is the best way that Hector can announce about change of the bonus structure.

Face-to-face meeting is a type of meeting where the participant of discussion are all present physically therein.

The major advantage of the Face-to-face meeting is that its allows effective communication and feedback from or among the participants

Therefore, the correct answer is Option B because it is the best way by which Hector can announce about change of bonus structure.

The missing options includes <em>"Héctor should send each employee a personal note, Héctor should call a face-to-face meeting with the employees, Héctor should send a companywide e-mail, Héctor should post an announcement in the break room, near the coffee machine."</em>

<em />

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Learn more about this here

<em>brainly.com/question/14617264</em>

6 0
2 years ago
X-Mart uses the perpetual inventory system to account for its merchandise. On May 1, it purchased $400 of merchandise on account
AlexFokin [52]

Answer:

The journal entries to record the whole purchase and payment process are:

May 1, purchase of merchandise on account

Dr Merchandise inventory 400

    Cr Accounts payable 400

May 3, defective merchandise returned

Dr Accounts payable 50

    Cr Purchase returns and allowances 50

Dr Purchase returns and allowances 50

    Cr Merchandise inventory 50

May 10? payment of merchandise account

Dr Accounts payable 350

    Cr Cash 343

    Cr Purchases discounts 7

6 0
3 years ago
Consider a 3-year bond with a par value of $1,000 and an 8% annual coupon. If interest rates change from 8 to 6% the bond's pric
masya89 [10]
It’s B Decrease by 51.54 I hope this helps
3 0
3 years ago
A business that purchases products in large quantities from producers and then sells it to another entity is known as a _____.
BigorU [14]
A business that purchases products in large quantities from producers and then sells it to another entity is know as a distributor. 

Distributors, distribute items to smaller retailers normally. They work as a warehouse with large quantities to sell to others in smaller quantities. 
7 0
3 years ago
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