Question: What is meant by going private? What are some advantages and disadvantages? Randys, a family-owned restaurant chain operating in Alabama, has grown to the point

What is meant by “going private”? What are some advantages and disadvantages?
Randy’s, a family-owned restaurant chain operating in Alabama, has grown to the point at which expansion throughout the entire Southeast is feasible. The proposed expansion would require the firm to raise about $15 million in new capital. Because Randy’s currently has a debt ratio of 50%, and also because the family members already have all their personal wealth invested in the company, the family would like to sell common stock to the public to raise the $15 million. However, the family wants to retain voting control. You have been asked to brief the family members on the issues involved by answering the following questions:

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Going private is the reverse of going public Typically the managers of a firm team up with a small g... View full answer

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