What are the incentives for a company to issue shares for the first time?
Answer:
There are two incentives. The first is to raise operating capital. This also the way inverstors can get thier money back with a profit.
The second incentive is that it provides the companiy's owner/manager/founder with an exit stategy. He/She can sell their stock and walk away with a healthy profit and the company continues operating.
This assumes that the company operates with a profit. If not, everybody loses.
Greetings!
That is an IPO Initial Public Offering and allows a corporation to go public. Usually to finance and bring capital into the corporation non derived from sales.
Good Luck
Its a way for the company to raise money from the public. In return the shareholders get dividends, just like getting interest from a bank. If the company goes bust however, then the shareholders are left with nothing.
the incentive is alot of money comes your way with not much effort
By issuing shares company will raise interest free finance to invest.
The answers post by the user, for information only, BAnswer.com does not guarantee the right.
Other Questions and Answers: