Initial Considerations
There are a lot of components of an IPO. There are a lot of considerations and requirements that should be met before a company goes public. For example, historical financial statements are necessary to evaluate the company’s value and risk. Many aspects must be taken into consideration before a company decides to go public. In fact, the process is so complex that many companies decide to withdraw in the mist of it. Table 1 below shows the number of companies withdraws from the process after the passage of the Sarbanes-Oxley Act of 2002:
The Cost of an IPO
Though used to raise capital, companies incur considerable amount of cost directly related to an IPO. For instance, a company going public incur legal cost, accounting …show more content…
PwC’s survey shows that 84 percent of companies that go public have to hire at least one to 5 new employees to fill the need of SEC reporting capacities. Hence, the SEC reporting is only one of the new position that have to the filled. According to PwC’s report, a company listed on NYSE are required to have an internal audit function. Table 2 below summarizes the stuffing needs of new public companies as well as their salaries costs.
The Advantages and Disadvantages of an IPO
Many companies are tempted to go public for its many advantages. Hence, for the most part the advantages of going public overpower the advantages, that is the reason many companies decide to move forward with the process as Table 1 shows. According to Allison et al (2008), these are the advantage of being a public company:
• The access to large amount of money for expansion, greater talents retentions, or increased marketing and development of new products or services;
• Access to financial markets that were impossible before the IPO; the access to public capital markets enables the public capital to raise money in a faster and less costly ways (e.g. Issue of commercial papers or …show more content…
The requirement for certifications the CEO and CFO for variety for accounting disclosure and internal control over financial reporting releases.
The Process of Getting an IPO
After considering the cost of going and maintaining a public company and all the advantages and disadvantages, if the company decides to finish the process, they have to meet some requirement and ask for advisory support from underwriters and auditors. The process of going public can vary between companies; it can take weeks or month depending on how the company works with it advisor. Thus, it is important that a company understand the requirements and how to properly select the advisor (auditors, underwriter or broker, etc) to make the process goes as
There are a lot of components of an IPO. There are a lot of considerations and requirements that should be met before a company goes public. For example, historical financial statements are necessary to evaluate the company’s value and risk. Many aspects must be taken into consideration before a company decides to go public. In fact, the process is so complex that many companies decide to withdraw in the mist of it. Table 1 below shows the number of companies withdraws from the process after the passage of the Sarbanes-Oxley Act of 2002:
The Cost of an IPO
Though used to raise capital, companies incur considerable amount of cost directly related to an IPO. For instance, a company going public incur legal cost, accounting …show more content…
PwC’s survey shows that 84 percent of companies that go public have to hire at least one to 5 new employees to fill the need of SEC reporting capacities. Hence, the SEC reporting is only one of the new position that have to the filled. According to PwC’s report, a company listed on NYSE are required to have an internal audit function. Table 2 below summarizes the stuffing needs of new public companies as well as their salaries costs.
The Advantages and Disadvantages of an IPO
Many companies are tempted to go public for its many advantages. Hence, for the most part the advantages of going public overpower the advantages, that is the reason many companies decide to move forward with the process as Table 1 shows. According to Allison et al (2008), these are the advantage of being a public company:
• The access to large amount of money for expansion, greater talents retentions, or increased marketing and development of new products or services;
• Access to financial markets that were impossible before the IPO; the access to public capital markets enables the public capital to raise money in a faster and less costly ways (e.g. Issue of commercial papers or …show more content…
The requirement for certifications the CEO and CFO for variety for accounting disclosure and internal control over financial reporting releases.
The Process of Getting an IPO
After considering the cost of going and maintaining a public company and all the advantages and disadvantages, if the company decides to finish the process, they have to meet some requirement and ask for advisory support from underwriters and auditors. The process of going public can vary between companies; it can take weeks or month depending on how the company works with it advisor. Thus, it is important that a company understand the requirements and how to properly select the advisor (auditors, underwriter or broker, etc) to make the process goes as