Case Finance Writen - Group 1: Mikee Baliguat Jazzer...

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[] Group 1: Mikee Baliguat Jazzer Estrellanes Florence Khriss Gonzaga Lance Vincent Llamas Ann Dominique Ramos Karen Paula Tabtim BABA2A 1.) What are the advantages and disadvantages of going public? Do you agree with Dan’s Concern or do you concur with the other members of the Short family regarding the issue of an IPO? Explain why. From humble beginnings of Matt and Edith, together with their children Lisa, Dan, and Joe, they didn’t expect that selling cleaning products would someday make them owners of a multi- million dollar firm; the Citrus Glow. Within 20 years of business, their sales boost up to $500,000,000. Together with the expansion of their product line, their production facilities had began to feel the strain. Thus, Matt decided to ask for suggestions of his children with regards to issuing an IPO. With the suggestions of his children, we have identified some advantages. First, they will be able to raise a significant amount of capital. Second, with the competitors coming up, they will be able to stay ahead of the game. On the other hand, there may also be a disadvantage. Like what Dan had stated, they may lose control over the firm. However, we don’t agree with Dan’s concern. This is because if they stay private, they might have a hard time raising the capital they need. They have to consider the fact that they have competitors who are coming up with substitute products and who may be as competent as they are. They have to come up with new ideas like expanding their product line for them to be able to be ahead of the other firms. In order to do so, they have to raise a significant amount of capital. Also since they (Dan, Lisa, and Joe) have the knowledge on how to value their firm, surely they wouldn’t be threatened of losing control over the firm. They
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This note was uploaded on 02/20/2012 for the course ACCOUNTING 102 taught by Professor Calamba during the Summer '11 term at Universität St. Gallen (HSG).

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Case Finance Writen - Group 1: Mikee Baliguat Jazzer...

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