List the advantages and disadvantages of quotations of companies in finance management

      

List the advantages and disadvantages of quotations of companies in finance management

  

Answers


Ruth
Advantages of Quotations
• A quoted company is able to raise finances quickly and easily.
• A quoted company is considered to be financially stable.
• A quoted company can easily obtain a loan.
• A quoted company can compare itself with other companies.
• There is prestige associated with quoted companies.
• Quoted companies are forced to operate within certain guidelines

Disadvantages
• Loss of secrecy- means the company losses its secrecy through the publication of the
company’s shares. The secrecy is also lost by inspection of the books of accounts by the
shareholders or by the public.
• In case the company’s profits decline this will be revealed to the public and will lower the
share prices of such a company.
• There is loss of control to incoming shareholders.
• It is expensive because of the fee payable to the stock market.
• The formalities of quotation are tedious and tiresome.
• Immediately after quotation the prices are likely to be low.
• A quoted company can easily be taken over by people buying shares in the stock
exchange.
NatalieR answered the question on February 9, 2022 at 09:37


Next: List and Explain Members of the stock exchange
Previous: Define par value as used in financial management

View More Financial Management I Questions and Answers | Return to Questions Index


Exams With Marking Schemes

Related Questions