Which of the following is/are a disadvantage (s) of raising share capital through the Primary Market?
Answer & explanation
Correct answer: option 4
While there are benefits to going public, it also means additional obligations and reporting requirements such as:
Increasing accountability to public shareholders
Need to maintain dividend and profit growth trends
Becoming more vulnerable to an unwelcome takeover
Need to observe and adhere strictly to the rules and regulations by governing bodies Increasing costs in complying with higher level of reporting requirements
Relinquishing some control of the company following the public offering
Suffering a loss of privacy as a result of media interest
Increasing accountability to public shareholders
Need to maintain dividend and profit growth trends
Becoming more vulnerable to an unwelcome takeover
Need to observe and adhere strictly to the rules and regulations by governing bodies Increasing costs in complying with higher level of reporting requirements
Relinquishing some control of the company following the public offering
Suffering a loss of privacy as a result of media interest