Going public can be beneficial to a firm by helping it
A) create a liquid currency to fund future acquisitions.
B) avoid becoming a takeover target in the future.
C) erect a shield against the fluctuations of the stock market.
D) offer better compensation packages to attract superior management talent.

Question

Quizplus · Accepted Answer

Going public allows a firm to create a liquid currency by selling shares to the public, which can then be used to fund future acquisitions. This can be beneficial for the firm's growth and expansion plans. Option B is not necessarily true as going public does not provide a shield against takeover attempts. Option C is not valid as going public exposes the firm to the fluctuations of the stock market. Option D is not correct as a public firm may have to offer competitive compensation packages to retain and attract management talent, but it does not necessarily offer better compensation packages than private firms.

Going Public Can Be Beneficial to a Firm by Helping