Caladonia Products Integrative Problem

Q .1 WHAT IS AN IPO

Initial Public Offering (IPO ) means any public limited organization offer its stocks first time to the public through which organization raises its funds . Initial Public Offering (IPO ) is mostly issued by newly firms to raise capital . Under IPO , organizations take assistance by underwriting firms . These firms decide what type of security offer to public ? When to announce IPO ? What will be the fair price of the security ? etc

Q .2 HOW DOES AN IPO ALLOW AN ORGANIZATION TO GROW FINANCIALLY

An Initial Public Offering (IPO

) permits organization to sell stocks in exchange of cash . This cash surely will be invested on future projects of the company through which organization generate further cash flows and that 's cash flows generate the further assets for the company . The other benefit of IPO is the cost of fund . Generally , in IPO the cost of fund is minimal than to raise fund through external Debt . Importantly IPO provides ample and sufficient funds to the organizations

Q .3 WHEN IS A MERGER OR AN ACQUISITION , INSTEAD OF AN IPO , MORE APPROPRIATE

Off course , Merger or an acquisition is most effective and appropriate than the Initial Public Offering (IPO . Although , Initial Public Offering (IPO ) only provides the immediate funds to the company tin order to use in new projects . But Merger or Acquisition means the combination of resources of two existing organizations . These resources include larger Capital , Competitors advantage , Tax-saving opportunity and Debt potential etc . This function also allows the...