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Questions and Answers
What is an IPO?
What is an IPO?
- A process of going public to raise capital (correct)
- A process of going private to raise capital
- A process of merging with another company
- A process of going bankrupt
What are the benefits of an IPO?
What are the benefits of an IPO?
- Increased brand visibility (correct)
- Increased market share
- Increased profits
- Lower taxation
What are the risks of an IPO?
What are the risks of an IPO?
- Underperformance of the stock
- High costs and time associated with the process (correct)
- Loss of control of the company
- Loss of existing customers
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Study Notes
- An IPO is the process by which a private company becomes a public company by offering its stock to the public for the first time.
- An IPO allows a company to raise capital by selling a percentage of its ownership to the public, usually through an investment bank or brokerage firm.
- The benefits of an IPO include the ability to fund growth, expansion, research and development, and other business ventures, as well as increased brand visibility.
- The risks of an IPO include the possibility of underperformance of the stock after it goes public, as well as the costs and time associated with the process.
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