Highlight four advantages and disadvantages to a company of being listed on a stock exchange.

      

Highlight four advantages and disadvantages to a company of being listed on a stock
exchange.

  

Answers


Martin
Advantages of being listed
- New funds may be easily obtained from the stock exchange
- Easy pricing of shares
- A better credit standing obtained
- Easy share per transfer (ownership)
-Buying other companies is easier
- Wide ownership of the firm
-Reduction in perceived risk by shareholders
- Greater prominence and status given to quoted companies may create goodwill for
the company.

Disadvantages
- Cost of floating
- Stringent stock exchange regulation
- Agency problem due to divorce of management and ownership
- Dilution of control from wider holding of shares
- Increased chances of forced take over.
- Extra administrative burdens on management
- Disclosure requirements
marto answered the question on February 8, 2019 at 10:41


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