Which of the following is a reason why companies go public?
A)to become a franchisee
B)to gain more control
C)to evade government taxation
D)to raise more capital
E)to reduce payment of dividends

Question

Quizplus · Accepted Answer

Companies go public to raise more capital by issuing stocks to the public. This allows them to access more funds than they would be able to through private investments.

Option A is incorrect because becoming a franchisee involves a company entering into a contractual agreement with another business to use its name, products and processes, and is unrelated to going public.

Option B is also incorrect because going public does not necessarily give a company more control. In fact, it often means giving up some control to shareholders, who have a say in company decisions.

Option C is incorrect because going public does not help a company evade government taxation. Publicly traded companies are subject to the same tax laws as privately held companies.

Option E is also incorrect because going public does not reduce payment of dividends. Dividend payouts are determined by a company's board of directors and are not directly influenced by it being publicly traded.

Which of the Following Is a Reason Why Companies Go