The company you work for has several projects that require substantial investment over the next three years. The company is currently privately held by a small number of investors. The group can no longer be counted on to supply the foreseen equity needs over the next three years. They asked you, the financial manager, to investigate raising the new equity financing needed by going public. Currently the financial marketplace has moderate interest rates and stock prices that appear high to the underlying cash flows being generate.

You need to first explain the process that the company will have to po through to achieve raising the money through an IPO.

What are the risks that the company faces by going public with its need for equity?

Can you understand and explain why a company would choose to or not to go poblic in this time?