What Are The Advantages And Disadvantages Of Enlisting A Company At The Securities Exchange Market

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QUESTION 1 (i)
Security markets refer to any type of financial investment at the stock market. A security market encompasses; equity markets, bond markets, and derivatives markets. Only a few companies in East Africa are enlisted at the stock exchange due to the technicalities of listing companies and the disadvantages that comes with it. Enlisting a company at the securities exchange market has advantage and disadvantages. The following are some of the advantages and disadvantages of enlisting a company at the securities exchange market;
Advantages of Enlisting a Company at the Securities Exchange Market
(a) Free Coverage and Publicity;
Enlisting a company at the securities exchange market gives a company free coverage and publicity. Every day in our news channels we get to know which companies are gaining or loosing at the stock exchange market. This makes a company to be known to new potential
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This additional capital can be used by the company to expand the business, marketing, research and development, advertisement and many more. Instead of companies borrowing money from the bank and other financial institutions which is more expensive, listing the company at the stock exchange market solves this problem.
(c) Helps Companies to do Business Easily;
It is easy for companies which are listed at the security exchange markets to be able to do things like acquisitions by the use of the quoted shares as currency. The investors are able to weigh the worth of the business by the value of the company’s shares in the market.
(d) Attracts High Profile Board Members;
When a company gets to be enlisted at the securities stock market, high profile qualified board members can be attracted to the company since the listed status provides a genuine liquid incentive plan.
(e) Improves Public

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