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Conclusion and recommendation for the company it can

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Conclusion and recommendation for the company, it can be preferable to issue common stock, this will reduce the ownership power but will guarantee an investment that doesn’t require interest payment. Corporate bonds don’t interfere with the company’s management but require payments of interest on a fixed period basis, and it can take some time to this new investment to bring profit. To avoid a situation of a business failure, the company may choose common stock, and accept the loss of entire ownership, instead of a risk of losing the company. As a small company, probably unknown, it is not easy to have investors that accept to bring their money, but as in public equity there is the asymmetry of information (Folta & Janney, 2004) between internal and market information, the company may benefit from it and raise the capital. Whatever the choice of the company, its success will depend on how the IPO process is conducted. The IPO process costs time and money for the company. This process needs good preparation unless it will result in a failure. The internal organization of the company and its prestigious view can attract more investors (Certo, 2013), as they will feel in confident with the
Running head: BUS 5111 – Dottie’s Grocery Case Study– Assignment 6 6organization. Despite IPO preparation by the company and its underwriter, some stages need particular attention as they may be determinant in the success of the offering. An important consideration, in this case, is that the Jumpstart Our Business Startups Act or JOBS act has reduced the process of IPO for growth and emerging companies, which may benefit Dottie’s Grocery. In the JOBS Act financial process is easier, for example the number of years of audited financial statements will be two. For this company, it is better to consider the benefits of the JOBS act that made easier the process of going public (Roe, 2012).
Running head: BUS 5111 – Dottie’s Grocery Case Study– Assignment 6 7ReferencesCFI. (2015).IPO Process - A Guide to the Steps in Initial Public Offerings (IPOs). Corporate Finance Institute. -process/Hall, M. (2020, February 24). What "Going Public" Means. Retrieved fromHayes, A. (July 29, 2019). Initial Public Offering (IPO). Retrieved from Corporate Finance Institute (n.d) IPO Process.Folta, T. B., & Janney, J. J. (2004). Strategic benefits to firms issuing private equity placements.Strategic Management Journal,25(3), 223–242. doi: 10.1002/smj.373Certo, S. (2013). Influencing Initial Public Offering Investors with Prestige: Signaling with Board Structures. The Academy of Management Review,28(3), 432-446.IPO On-Ramp: The Emerging Growth Company. (n.d.). Retrieved from
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Term
Fall
Professor
Dr. Schmidt
Tags
Dottie s Grocery

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