Robinson Linens has made the decision to "go public" through an initial public stock offering (IPO). Robinson Linens undertook this process to
A) reduce capital, reduce debt, improve the balance sheet, and enhance net worth.
B) raise capital, reduce debt, improve the balance sheet, and dissolve net worth.
C) raise capital, reduce debt, improve the balance sheet, and enhance net worth.
D) raise debt, raise capital, improve the balance sheet, and enhance net worth.
E) raise debt, reduce capital, improve the balance sheet, and enhance net worth.

Question

Quizplus · Accepted Answer

Robinson Linens has decided to "go public" through an IPO in order to raise capital, which means selling shares of the company to investors in exchange for money. This will increase the company's cash position and help reduce any existing debt. Going public will also help improve the balance sheet by increasing the company's equity position through the sale of shares. Finally, as the company's equity position improves, so will its overall net worth, enhancing its financial standing. Therefore, the best choice is C.

Robinson Linens Has Made the Decision to "Go Public" Through