Citrus Glow International is interested in going for an IPO. The reason behind it is that an IPO will enable the company to go public. By going public Citrus Glow International would benefit financially with an increased capital financing. This increase in the capital can be used by the company for research and development as well as for expanding the operations of the company to match the competition in the market. Moreover the public awareness of the company will also be increased as the IPO will generate publicity for the company.
The main advantage that will be available to the company would be the increase in the market share of the company. The increased operation as well as the increased resources of the company will enable it to reach to the people in the market who previously either were not aware of the product or did not have access to places where the product could have been bought. The disadvantages of the approach however pertain to increases rules and regulation that company will have to comply with the state, and the increase scrutiny which would be placed on Citrus Glow International. Additionally disclosures will have to be made for the investors in the business through the SEC Act of 1934. Financial reporting documents as well as investor relation departments would also need to be launched by the company which can increase the costs for the company through the Sarbanes Oxley Act.
The Citrus Glow International Company should go for an IPO as this would greatly help the company in terms of competing with the substitute product manufacturing companies in the market as well as maintain the current position that they have in the mind of the consumer. The valuation of the company should be done on the basis which is most beneficial and realistic in terms of decision making and the long term objectives of the company.
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