Becoming a Public Corporation
Objective 17-6 Identify the reasons a company might make an initial public offering of its stock, explain how stock value is determined, and discuss the significance of market capitalization.
Initial public offerings (IPOs), the first sale of a company’s stock to the general public, are a major source of funds that fuel continued growth for many firms and introduce numerous considerations inherent in running a public company. In one of the biggest IPOs in history, Facebook’s public offering of common stock in 2012, with an opening price of $38 per share, raised more than $100 billion. In this section, we discuss many of the issues public companies face, such as potential loss of control, fluctuating share prices, ...
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