Question
Initial Expansion Gonzales is a closely held corporation considering amajor expansion. The proposed expansion would require the firm to raise $10 million in additional capital.
Initial Expansion Gonzales is a closely held corporation considering amajor expansion. The proposed expansion would require the firm to raise $10 million in additional capital. Because Gonzales currently has 50 percent debt and because the family members already have all their funds tied up in the business, the owners cannot supply any additional equity, so the company will have to sell stock to the public. The family wants to ensure that it will retain control of the company. This offering would be Gonzaless first stock sale, and the owners are not sure exactly what would be involved. For this reason, they have asked you to research the process and to help them decide how to raise the needed capital. In doing so, you should answer the following questions:
A. Is the stock of Gonzales Food Stores currently publicly held or privately owned?
B. Would this situation change if the company undertook a stock sale?
C. What are the disadvantages and advantages of going public?
Please answer A, B, and C. The helpers keep answering only letter "C"
What are the disadvantages and advantages of going public?
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