The Accounting Review Vol. 34 No. 4 1959
PUBLIC FINANCING FOR SMALL CORPORATIONS .
Abstract
The article focuses on comprehensive treatment of public stock financing for small corporations. It is based principally on case studies obtained in the field by the author, and also on mail surveys, the study of appropriate prospectuses, and published materials. The first part of the study considers the desirability and feasibility of public stock financing. Among the advantages found were the value of raising permanent funds without fixed charges or restrictions, the resulting improvements in credit rating and increase in borrowing power, the creation of a market useful in "unfreezing" the investment of old stockholders and helpful in settling estates, the ability to allow employees to participate in ownership etc. Disadvantages included the high cost of flotation and cost of capital, the assumption of new responsibilities, the time and effort involved and sometimes the uncertainty of obtaining the desired funds. An almost complete lack of understanding of public financing and unjustified fears of loss of control were found among presidents of many corporations which were ripe for public financing but had never attempted it.
- DOI
- 10.2308/tar-7059063
- Volume
- 34
- Issue
- 4
- Pages
- 619-620
- Language
- en
- Sources
- openalex crossref