Public Offering

There are two main reasons why a company would want to become public
Obtain capital to support their growth
The owners want to sell out


An investment bank will agree to buy the company's stock with its own money. After it has purchased the shares, it will then try to immediately resell the shares to investors at a higher price. The difference between the two prices is called the markup and is usually between 1 and 5 percent of the share price.

Companies can raise capital in a variety of different ways

Bank Loans - sometimes a sydicate of banks to spread the risk. Interest may be fixed or variable
Shares - issuing shares with a dividend, also looking for capital gains (hoping the share price will increase over time)
Bonds - with a fixed rate of interest and a string obligation to meet the payment
Loan Stock -
Industrial Debenture -

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