Initial Public Offering Flashcards, test questions and answers
Discover flashcards, test exam answers, and assignments to help you learn more about Initial Public Offering and other subjects. Don’t miss the chance to use them for more effective college education. Use our database of questions and answers on Initial Public Offering and get quick solutions for your test.
What is Initial Public Offering?
An Initial Public Offering (IPO) is the process by which a privately held company’s shares are made available to the public for the first time. IPOs are often considered an important milestone in a company’s development and can be seen as a sign of success. By going public, a company can access additional capital to expand its operations, provide liquidity to existing shareholders, and even increase public awareness of its brand.The IPO process typically begins with a decision by management to go public, followed by an internal review of corporate policies and procedures that must be adapted for compliance with federal regulations governing publicly traded companies. Once these processes have been completed, the company will need to submit filing documents such as a prospectus and registration statement with the Securities & Exchange Commission (SEC). The SEC will then review these documents and decide if they meet legal requirements before allowing the IPO to proceed.The next step is for investment banks to conduct due diligence on behalf of potential investors by evaluating factors such as financial performance, management team experience, competitive landscape, and regulatory environment. After this assessment is completed successfully, an offering price will be set in order to attract buyers in what is known as an underwriting agreement.