1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
bazaltina [42]
2 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]2 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.

You might be interested in
Which of the following statements is FALSE? There is no need to evaluate mutual fund investments because investment companies hi
Anna35 [415]

Answer: Statement that “There is no need to evaluate mutual fund investments because investment companies hire the best professional managers they can to manage their funds “ is FALSE

 A mutual fund is a pool of stocks, bonds or other funds where an investor purchase his shares. He gets one to meet his investment goals so evaluating a mutual fund's performance is needed and must involve thorough research to lessen risk.  

 Professional fund managers do make mistakes, so it is a must that investors continually evaluate their mutual fund investments. 

8 0
3 years ago
Read 2 more answers
Madison wants to open a restaurant and plans to employ a staff of about 10 people, including wait staff and cooks. what type of
Arada [10]
The fact that Madison wants to open a restaurant and plans to employ a staff of about 10 people, including wait staff and cooks means that Madison is planning to create a flat type of organization. The units and positions within the flat organization are flat distributed, which means there are <span>few or no levels of middle management between staff and executives.</span>
8 0
3 years ago
On January 1, 2021, PokemonGo Company leased equipment to Waldo Corporation under a lease agreement that qualifies as an operati
ankoles [38]

Answer:

Investment in bonds= 4,300,000

loss on investments (6,100,000-4,300,000= 1,800,000)

The unrealized holding loss ($1,800,000) on transfer to a new category of trading securities is included in income.

Explanation:

how I know is bc I've been playing the moblie game and card game since it became popular also been hearing daily about the moblie game

8 0
2 years ago
An online bank is offering to pay 0.25 % interest per month on deposits. Your local bank offers to pay 0.75 % interest quarterly
Liono4ka [1.6K]

Both have the same interest rate which is 3%.

<h3>What is interest?</h3>
  • In finance and economics, interest is the payment of an amount above the repayment of the principal sum by a borrower or deposit-taking financial institution to a lender or depositor at a specific rate by a borrower or depositor.
  • It differs from a fee that the borrower may pay to the lender or a third party.

To find the higher interest rate:

Given that,

  • Interest rate per month = 0.25%
  • Interest rate per quarter = 0.75%

If we calculate the annual interest for monthly and quarterly rates, it will be:

Monthly

  • No. of months in a year = 12
  • Monthly rate = 0.25%

So,

  • Annual Interest = 0.25 × 12
  • = 3%

Quarterly

  • No. of quarters in a year = 4
  • Quarterly rate = 0.75%

So,

  • Annual Interest = 0.75 × 4
  • = 3%

Therefore, both have the same interest rate which is 3%.

Know more about your interests here:

brainly.com/question/2294792

#SPJ4

4 0
1 year ago
Marko, Inc., is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $5,700, $10,700, and
vovikov84 [41]

Answer:

Total PV= $26,176.63

Explanation:

Giving the following information:

Cash flow:

Cf1= $5,700

Cf2= $10,700

Cf3= $16,900

<u>To calculate the price of the investment now, we need to use the following formula on each cash flow:</u>

PV= Cf / (1+i)^n

PV1= 5,700/1.11= 5,135.14

PV2= 10,700/1.11^2= 8,684.36

PV3= 16,900/1.11^3= 12,357.13

Total PV= $26,176.63

7 0
2 years ago
Other questions:
  • Dottie Beauchamp recently was hired by PetSmart to help recruit, select, and train new employees to work in its stores. Beaucham
    5·1 answer
  • American shoppers usually do not like it when a store is so cramped that the customers may touch one another while shopping. whe
    14·2 answers
  • You own a small store. Your cashier thinks you should lower prices to increase your total revenue and your friend thinks you sho
    11·1 answer
  • The CEO of a business firm wants to increase the productivity of the employees while minimizing the labor costs incurred by the
    6·1 answer
  • Steve's utility for socks (91) and other goods (92) is given by U(21,92) = 10q1.1 q2.9 The price of the composite good is p2=1 a
    14·1 answer
  • The government of Granita is thinking about imposing a very small tax on one or more of the following goods: anvils, books, and
    9·1 answer
  • Answer the question on the assumption that the legal reserve ratio is 20 percent. Suppose that the Fed sells $500 of government
    13·1 answer
  • Flo is considering three mutually exclusive options for the additional space he plans to add to the K-State Superstore. The cost
    15·1 answer
  • What are the three main goals of monetary policy?
    12·1 answer
  • f pat and chris each spend half their time on each task then: the outcome will be efficient they will plant more bulbs
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!