Filing for an IPO
In this topic assignment, you will choose and research a company that is filling for an IPO, and to evaluate the possibilities for financing the company’s growth strategies.
Find a company that is scheduled for an IPO for which you can locate a sufficient amount of detailed information related to its financing and the IPO. You can find a list of such companies in the IPO Center on the MSN Money website. (See MSN Money for the latest articles on the current state of the IPO market and other financing options.)
Filing for an IPO Assignment
This assignment asks you to develop a concise topic paper that argues either that an IPO is the proper way for the company to finance operations and growth or that you believe some other method is preferable. Rather than reiterating the purposes for which the company intends to finance, please indicate the pros and cons of each potential method of financing in support of your argument.
As your assigned readings indicate, "taking your company public" and thereby selling equity to finance growth is a widely used (in the U.S. anyway) alternative to:
- Borrowing from bank and bank-like institutions (not the least of which is insurance companies)
- Selling bonds (the interest rate for which would be astronomical, junk bond status, given the often inadequate history of earnings, assets, etc. On the positive side, the tax treatment is pretty good.)
- Self-financing (for the aforementioned reasons)
Your instructor will evaluate this assignment based on the following factors:
- Your ability to relate your answers to concepts in the assigned readings
- The depth and quality of your analysis of the questions presented
- The insights you provide in your response
- The clarity and coherence of your analysis