Finanzas

Paula De Felice November 8, 2011
Growing the Business Assignment


1. If I were to sell Tranquil Hotels Co. as a private operation, the price range I would currently assign to it would befrom $7,500,000 to $7,875,000.

2. The IPO process the owners would need to go through if they decided to take the company public would be to first, hire an investment banking firm to manage theprocess of going public. Then, they will need to hire a lawyer to write the prospectus of the company and an accountant to prepare certified audits for the company’s prior three years of operation.After the prospectus is drafted, a series of meetings is set up with the investment banker, chief executive officer, and chief financial office to meet prospective institutional investors and retailstockbrokers to sell them the merits of the IPO’s. Then, the company must price the offering and finalize how much of the company the existing owners are willing to sell to the public. Finally, the ownerwill meet with the management of the stock exchange that has been selected and when the bell rings, signifying that the stock exchange is open for business, the company has officially gone public.If I were an owner I would go public because there are several benefits to being a public company. An initial public offering allows a company to tap a wide pool of investors to provide itself withcapital for future growth, repayment of debt or working capital. Also, a company that sells common shares is never required to repay the capital to investors. The exposure, prestige, and public imagethey will receive from becoming a public company will help the company’s growth and they should start seeing annual cash flows of more than 5% and possibly reach the goal of 15%.

4. If the owner isconsidering getting out of the business, he or she should take the company public because after determining how much the company would sell for today with the comparison of the company’s price in a...