FIN/370 Information For Initial Public Offering
Risks involved in the public offering and how the securities laws deals with them
Public offering can be very rewarding but there are also risks involved. When one invests in public offering stocks, they are sharing the risks of the company. (Financial Web n.d.) The investor can lose his or her investment if the company doesn’t do good. Since companies don’t share a lot of information this is also a risk. Information needs to be provided to the (SEC) Securities and Exchange Commission when a company goes public, but this doesn’t mean that enough information is provided. Ninety percent of the companies that are going public for the first time are new companies, therefore it could be a long time before their prices can increase and for the company to get off the ground. (SEC) Securities and Exchange Commission does not have the power to regulate how the business decisions and stocks are allocated.
Foreign Exchange risks the company can face with your ideas on how to mitigate them
When buying or selling to a foreign country you are risking a lot. You need to worry about the inflation of the other country, the political stand and their economic stability. Companies need to think about foreign exchange and anticipate receiving a lower amount depending on the exchange rates of the foreign country. Accounting exposure also applies when assets and liabilities need to be converted into the foreign currency for accounting purposes. The conversion normally results in a foreign exchange gain or loss. There are several benefits that can help reduce a company’s foreign exchange exposure. They can minimize the effects of exchange rate movement on profit margins and facilitate the pricing of products sold on export markets. Another idea is to open bank accounts in the countries where they will be doing business to avoid exchange rates.
Public offering can be very rewarding but there are also risks involved. When one invests in public offering stocks, they are sharing the risks of the company. (Financial Web n.d.) The investor can lose his or her investment if the company doesn’t do good. Since companies don’t share a lot of information this is also a risk. Information needs to be provided to the (SEC) Securities and Exchange Commission when a company goes public, but this doesn’t mean that enough information is provided. Ninety percent of the companies that are going public for the first time are new companies, therefore it could be a long time before their prices can increase and for the company to get off the ground. (SEC) Securities and Exchange Commission does not have the power to regulate how the business decisions and stocks are allocated.
Foreign Exchange risks the company can face with your ideas on how to mitigate them
When buying or selling to a foreign country you are risking a lot. You need to worry about the inflation of the other country, the political stand and their economic stability. Companies need to think about foreign exchange and anticipate receiving a lower amount depending on the exchange rates of the foreign country. Accounting exposure also applies when assets and liabilities need to be converted into the foreign currency for accounting purposes. The conversion normally results in a foreign exchange gain or loss. There are several benefits that can help reduce a company’s foreign exchange exposure. They can minimize the effects of exchange rate movement on profit margins and facilitate the pricing of products sold on export markets. Another idea is to open bank accounts in the countries where they will be doing business to avoid exchange rates.