All of the following are disadvantages of going public except for which one?
A)The firm may now more easily become active in mergers and acquisitions.
B)The company must make more information available to the public through filings to the SEC and the state.
C)An erosion in value may take place after the initial offering.
D)There is a high cost associated with going public.

Question

Quizplus · Accepted Answer

Going public may increase the availability of funds for mergers and acquisitions, as the firm can use its shares as currency. However, B, C, and D are all valid disadvantages of going public. The company must disclose more information to the public, which may include sensitive financial and strategic data. There is also a risk that the value of the firm's shares may decrease after the initial public offering due to market fluctuations or poor performance. Finally, the costs associated with going public, such as underwriting fees, legal fees, and accounting fees, can be significant.

All of the Following Are Disadvantages of Going Public Except