Funding a company through a private sale of stock has several distinct advantages, including:

Question

Quizplus · Accepted Answer

A) Private sales of stock are indeed exempt from the expensive and time-consuming process of SEC registration, which is a significant advantage. B) Private funding allows companies that may not have strong or established credit ratings to secure financing, which might not be possible through public markets or traditional bank loans. C) is incorrect because it's not always true that firms pay less and suffer less ownership dilution with private placements compared to public offerings; the conditions vary based on market circumstances, the negotiation process, and the specifics of each deal.

Funding a Company Through a Private Sale of Stock Has