Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Why don’t all firms go private to capture these benefits?
Expert Solution
Step 1
The firm’s go private based on the following benefits,
Step 2
Benefits of going private: Being acquired might create significant financial gain to shareholders & CEOs, and reduced regulatory & reporting requirements free up management's time, energy & money from the compliance requirements & short-term earnings management & can focus on the long-term goals thus providing long-term benefits to company & its shareholders.
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