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Public versus Private Financing

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List the advantages and disadvantages of Public versus Private Financing. Discuss why companies go to private and leveraged buyouts.

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Solution Summary

This solution compares and contrasts public and private financing.

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Public versus Private Financing

A privately owned company is a company that is under the possession of a founder (s), management or a group of private investors. The financing of this type of company is done by the owners, who take sole responsibility of the operations of the organization. A company that is public has sold a segment of the company to the general public through initial company offering of stocks. This means that the shareholders of the organization own a part of the company and are entitled to a portion of the company's assets and profits. Public vs. private financing occurs when the government and a private sector company fund and enterprise through joint partnership (What is, 2011).

The Advantage of Public versus Private Financing

The two entities, i.e. the government and the private sector that are involved in ...

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