QUESTION IMAGE
Question
select one reason why a company would want to go private.
to reduce investor involvement in the companys operations
to receive a large injection of capital, if private investors are willing to buy the company’s stock at an above-market price
to increase the company’s exposure and prestige
to broaden and diversify
Brief Explanations
- Analyzing each option:
- "To reduce investor involvement in the company's operations" is a valid reason for going private, as public companies have more investor scrutiny and involvement.
- "To receive a large injection of capital..." is incorrect because going private typically involves buying back shares (reducing capital from public investors), not receiving a capital injection in the same way.
- "To increase the company’s exposure and prestige" is incorrect as public companies generally have more exposure.
- The last option (partially visible) about broadening is incorrect as going private narrows ownership, not broadens.
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A. To reduce investor involvement in the company's operations