Publicly Traded Equity Financing
Equity financing refers to the process of increasing funds for business through trading entire or limited tenure of an organization`s equity for funds or others resources. In funding organizations, this is the main and usual process for selling either ordinary shares, favored shares or some blend of the two (Berk, 2013). This process has advantages and disadvantages, which affect the progress of involved organizations.
Public listed organizations find it easy to raise money for expansion, diversity, and working capital needs through this process. It also allows directors and some large stakeholders to reduce individual financing and assurances. A stock exchange listed organization realizes value addition for its shareholders beyond the book value. Another advantage is that listed shares may be used as currency in facilitating mergers and acquisitions (Whittington, 2013). Hence, this enhances the expansion of the scale and scope of the organization`s business and operations to allow reaping of greater value (Berk, 2013). Moreover, prestigious listed public organization attracts enhanced ability and human resources for easy and sustained management sequence.
Listed organizations are exposed to augmented public scrutiny since monetary data must be disclosed in the annual report in a timely and transparent manner. Most the administrations time is dedicated to accomplishing statutory requisites (meetings, monetary reporting, and investor association engagements) (Whittington, 2013). Listed organizations must comply with a numerous regulations from a country`s stock exchange body (Berk, 2013). Compliance at this point concerns auditors, legal officers and their huge fees involved. Since publicly traded organizations have to annually disclose financial details, they have to strike a balance between keeping stakeholders informed and the risks of disclosing too much information to the benefit of competitors.
Two Publicly Traded Companies in the Sports Industry
The first company is Southampton Leisure Holdings PLC whose website is www.saintsweb.co.uk. The next organization is Manchester United FC., its website is www.manutd.com (Gibson, 2010).
Berk, J. (2013). Fundamentals of Corporate Finance. Boston: Pearson Higher Education AU.
Gibson, O. (March 2, 2010). “Manchester United falls behind Barcelona on Deloitte rich list.” The Guardian.
Whittington, R. (2013). Wiley CPA Exam Review 2013, Business Environment and Concepts. New York, NY: John Wiley & Sons.