Exam (elaborations)
BUS 5111 Unit 6 Discussion Assignment
- Course
- Institution
A guide to assignment focusing on Initial Public Offering in the USA and critical events and points of time.
[Show more]
Seller
Follow
MasterAddis
Reviews received
Content preview
Describe the Initial Public Offering (IPO) process in the USA to include critical events andpoints-in-time.
An initial public offering (IPO) is a process by which a private corporation raises capital by
offering shares to the public in a new stock issuance (Fernando, 2021). The company will be able
to raise the capital for various purposes and the private investors can participate in the offering.
The founding private investors will have the opportunity to sell their share and gain profit.
Private companies raise capital by being financed by a small number of shareholders however
when they want to take the business to the next level an IPO could be seen as a reasonable
choice. Private companies are required to meet certain criteria set by the Securities and Exchange
Commission (SEC) to hold an IPO (Fernando, 2021).
Private companies need to hire experts to consult on the IPO process usually investment banks
(Ashford, 2021). These experts are called underwriters and they help set the initial price for the
offering. Furthermore, the underwriters will prepare all the necessary technical and legal
documents and make an appointment with potential investors (Ashford, 2021).
IPO is a complex process that requires the involvement of several parties; hence it requires care
and sufficient time. The following are the common steps and timelines that a private company
may take during IPO. The first process as mentioned above is choosing underwriters and
building the IPO team. Companies should evaluate proposals from several underwriters based on
their experience, reputation, and long-term commitment to the company before making their
decision (Schueneman, 2021).
The IPO team is composed of underwriters, lawyers, certified public accounts, and SEC experts
(Fernando, 2021). They will prepare the registration document that addresses the money each
party makes in the IPO, financial summary, securities requirements, and other details. Choosing
underwriters and preparing the registration document would take significant time hence start a
year before the effective date is recommended (Schueneman, 2021).
Then this stage is followed by the cooling-off period where the company's financial statements
are evaluated by independent auditors and other regulatory bodies like the SEC and the Financial
Industry Regulatory Body (FINRA) (Schueneman, 2021). This period could be within six
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller MasterAddis. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78637 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now