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Homework answers / question archive / Which two of the following five statements are correct? Select two alternatives: As with IPOs, evidence suggests that companies over perform following a seasoned offering

Which two of the following five statements are correct? Select two alternatives: As with IPOs, evidence suggests that companies over perform following a seasoned offering

Finance

Which two of the following five statements are correct?

Select two alternatives:

  • As with IPOs, evidence suggests that companies over perform following a seasoned offering.
  • By going public, companies give their private equity investors the ability to diversify.
  • One advantage of an initial public offering (IPO) for the company is that the standards and requirements for financial reporting become lower after IPO.
  • An important consideration for investors in private companies is their exit strategy, that is how they will eventually realize the return from their investment.
  • Typically the issuance and transaction costs of raising equity capital are much lower for a firm compared to the costs of raising the same amount of debt financing.

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By going public, companies give their private equity investors the ability to diversify.

An important consideration for investors in private companies is their exit strategy, that is how they will eventually realize the return from their investment.

the above two are correct

because public listing the way to exit and get money back from the investments for the investors in private equity