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Question 5

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Essentials Of Investments
Found in: Page 79
Essentials Of Investments

Essentials Of Investments

Book edition 9th
Author(s) Zvi Bodie, Alex Kane, Alan Marcus, Alan J. Marcus
Pages 748 pages
ISBN 9780078034695

Short Answer

In what circumstances are private placements more likely to be used than public offerings?

When they have to avoid the time and cost involved in preparing public offering,

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Step by Step Solution

Definition

The term Public offering refers to the sale of shares of equity or other financial instruments of a corporation to raise funds for certain reasons.

Explanation

Preparing a public issue is a time consuming affair. Therefore, a firm which is willing to buy securities and wishes to avoid the time and cost involved in preparing public offering, may issue shares privately.

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