Going private

e process by which a public company ceases to be a public company is referred to as going private. The entire equity of the public company is urchased by a smaller group of investors.

a public company is bought using funds collected by the company's directors and officers, it is referred to as a

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utside equity in a buyout often comes from a private equity fund.

oing private affects the liabilities and equity side of the balance sheet and rearranges the ownership structure. Private equity funds raise capital fror stitutional investors and high$-$wealth individuals. With this capital, private equity funds work toward increasing the value of the company and vising a strategy for a profitable exit plan.

onsider the following statement about the benefits of going private from the company's perspective:

Managers start focusing more on the short$-$term, rather than the long$-$term, impact on the firm's value after the company goes private.

the statement true or false?

$$ False

$$ True