Disadvantages Of Netscapo Case

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Register to read the introduction… This entails various direct negotiations with institutions that raise money and then own a portion of the company in privately held shares of stock or other securities. Netscape could also take on more debt in order to finance future projects. This option would not be ideal though because Netscape is looking to expand over time and it would not be best to take on a lot of debt. Another source of future financing for Netscape would be a public offering, which is most commonly seen in the form of an initial public offering or an IPO. An IPO is when a company issues a portion of its stock to the public for the first time. An IPO is the more reasonable of the two sources for financing, as it would help to fund future growth. It would also be a good publicity move for Netscape because it would increase credibility and recognition in the industry.

5. What are the advantages and disadvantages of having an IPO?
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Some of the major disadvantages associated with an IPO are the underwriting fees and other expenses such as legal and accounting expenses. Additionally, filing with the SEC requires that you make quarterly and yearly public reports, which are also a burden. Another aspect of filing with the SEC is the initial prospectus which requires disclosure that gives competitors information about the company that they probably would not otherwise have had access to. Finally, the EPS of current shareholders will be diluted and going public exposes a company to the risk of a hostile

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