What is one advantage of a full listing for a company?

Master the Chartered Wealth Manager Exam with our comprehensive study tools. Prepare with flashcards and multiple choice questions complete with explanations and hints. Excel in your exam!

A full listing on a stock exchange provides a company with easier access to new capital, which is a significant advantage. When a company is fully listed, it enhances its visibility and credibility among investors, making it more attractive for potential shareholders. This heightened visibility leads to increased interest from institutional investors and the public, allowing the company to raise funds through issuing shares or other equity instruments more effectively.

Furthermore, being publicly traded often allows for a broader investor base, and shares can be sold more readily, aiding in liquidity. This access to capital is essential for growth, expansion, and investment opportunities, enabling the company to finance new projects or even weather financial challenges.

In contrast to a full listing, the other options indicate drawbacks or different considerations. Relinquishing control refers to the potential dilution of ownership, which might raise concerns for some current owners and management. Increased potential for takeover does not benefit the company but rather poses a risk that could threaten its autonomy. Lastly, higher operational costs are typically associated with being publicly traded, due to compliance, reporting, and auditing requirements, which can burden the company financially.

Thus, gaining easier access to new capital is indeed the most beneficial aspect of being fully listed on an exchange, empowering companies to pursue their financial and strategic objectives

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy