Finance
Virtual Organization: Lafleur Trading Co.
Virtual Organization: Lafleur Trading Co.
Initial Public Offering
For any company going public through an IPO creates a few strengths. Going through an IPO creates a large amount of capital. This capital does not have to be paid back nor does any interest have to be paid on it (Investopedia, 2013). An IPO also makes it easier for a company to get more capital funds later through public debt offerings (Reference for Business, 2013). A large influx of capital gives the company many new opportunities it did not have. One of the most profitable opportunities is created by a large influx of capital is a chance to delve into research and development. The capital from an IPO could also be used for capital expenditures or be used to pay off old debt.
Acquisitions
When a company acquires another, ultimately the parent company gains. Increased revenue and a decrease in expenses and salaries would be the first gain. The decrease of expenses and salaries would be from a reduction of back-office staff, such as marketing and accounting (Lacoma, 2013). Another plus for the acquiring company would be the skilled employees from the acquired company. The biggest opportunity for the parent company would be the acquired market share. This also increases the parent company’s revenue.
Effects of globalization on financial decisions:
Opportunities arise when options such as merging, staring an acquisition or IPO are then set in place for the growth of any company. When opportunities can be conversed, they have most of the threats following afterwards. When the Lafleur Trading Company decided going public, it then was present with appealing opportunities. One example is selling the common stock to help raise the funds to then expand or go global as a company. As some advantages of being the IPO, you are a stronger capital base company. You also have the ability to increase the financial prospects and keep a better
Virtual Organization: Lafleur Trading Co.
Initial Public Offering
For any company going public through an IPO creates a few strengths. Going through an IPO creates a large amount of capital. This capital does not have to be paid back nor does any interest have to be paid on it (Investopedia, 2013). An IPO also makes it easier for a company to get more capital funds later through public debt offerings (Reference for Business, 2013). A large influx of capital gives the company many new opportunities it did not have. One of the most profitable opportunities is created by a large influx of capital is a chance to delve into research and development. The capital from an IPO could also be used for capital expenditures or be used to pay off old debt.
Acquisitions
When a company acquires another, ultimately the parent company gains. Increased revenue and a decrease in expenses and salaries would be the first gain. The decrease of expenses and salaries would be from a reduction of back-office staff, such as marketing and accounting (Lacoma, 2013). Another plus for the acquiring company would be the skilled employees from the acquired company. The biggest opportunity for the parent company would be the acquired market share. This also increases the parent company’s revenue.
Effects of globalization on financial decisions:
Opportunities arise when options such as merging, staring an acquisition or IPO are then set in place for the growth of any company. When opportunities can be conversed, they have most of the threats following afterwards. When the Lafleur Trading Company decided going public, it then was present with appealing opportunities. One example is selling the common stock to help raise the funds to then expand or go global as a company. As some advantages of being the IPO, you are a stronger capital base company. You also have the ability to increase the financial prospects and keep a better
References: Investopedia. (2013). Retrieved from http://www.investopedia.com/ask/answers/06/ipoadvantagedisadvantage.asp Reference for Business. (2013). Retrieved from http://www.referenceforbusiness.com/encyclopedia/For-Gol/Going-Public.html#b Lacoma, T. (2013). Pros and Cons of Acquiring Another Organization. Houston Chronicle. Retrieved from http://smallbusiness.chron.com/pros-cons-acquiring-another-organization-22311.html Export. (n.d.). Retrieved August 31, 2013, from Small B: http://smallb.in/%20/exports%20/mitigating-exchange-rate-risk