For its first 8 years, Facebook, Inc., operated as a privately held corporation. The company had relatively few shareholders and had no obligation to report its financial results to the public or to regulators such as the Securities and Exchange Commission (SEC), which allowed co-founder Mark Zuckerberg to focus his energy on building Facebooks rapidly growing business. Just 6 years after its inception in Zuckerbergs Harvard dorm room, Facebooks user base surpassed the 500 million mark, and pressure mounted on Zuckerberg to take the company public via an initial public offering (IPO) of common stock. Such a move would allow Facebooks early investors to cash out and would make dozens of Facebooks employees rich, none more so than Zuckerberg himself. On May 18, 2012, Facebook launched its IPO by selling 421 million shares at a price of $38 per share. Almost immediately the price of Facebook stock rose as high as $45 per share, but there were signs of trouble. Technical problems on the NASDAQ stock exchange caused millions of orders for Facebook shares to be wrongly placed. Even worse, during the first month after Facebooks IPO, its share price fell to $30. Investors filed dozens of lawsuits, alleging that they were harmed not only by NASDAQs trading glitches, but also by the selective release of unfavorable financial information by Facebooks investment bankers and its senior managers. Once firms go public by selling shares to the public, they face a host of new pressures that private companies do not, so why do they go public at all? Often it is to provide an exit strategy for private investors, gain access to investment capital, establish a market price for the firms shares, gain public exposure, or all those reasons. Going public helps firms grow, but that and other benefits of public ownership must be weighed against the costs of doing so. A public firms managers work for and are responsible to the firms investors, and government regulations require firms to provide investors with frequent reports disclosing material information about the firms performance. The regulatory demands placed on managers of public firms can sometimes distract managers from important aspects of running their businesses. This chapter will highlight the tradeoffs faced by financial managers as they make decisions intended to maximize the value of their firms. Q1) Just after the IPO, Facebooks CEO, Mark Zuckerberg, owned 443 million shares. What was the total value of his Facebook stock immediately after the IPO and then again one year later? How much wealth did Zuckerberg personally lose over the year? Solve in excel