A
company is preparing to go public with an initial stock offering. Why is it
very important that...

Question

A
company is preparing to go public with an initial stock offering. Why is it
very important that its balance sheetincludes a credible value for ‘goodwill’?
Your
answer should be in a 4 to 5 paragraph essay with 1 cite of the text and 1 cite
of a recent research article, your experience and your critical thinking. The
two cites should be short enough that they are a max of 30% of the content. 70%
of the content should be your experience and your analysis.

Robert · Accepted Answer

Goodwill & Initial Public Offering
Initial Public Offering can be defined as the first sale of the shares or the stock by the company. 
It is carried by small or new companies to raise the capital to expand and establish their business. 
It can also be undertaken by the large private companies for the purpose of becoming public 
companies. The services of underwriting firm are undertaken by the issuer company. The 
underwriting company helps to ascertain which type of securities shall be issued, common stock 
or preferred stock, the best price at which securities shall be offered and the best suitable time at 
which securities shall be offered. The initial public offering is also known as public offering.
Goodwill is an asset account and is an intangible asset as it cannot be seen like physical asset. 
Goodwill can be self-constructed or purchased.

A company is preparing to go public with an initial stock offering. Why is it very important that its balance sheetincludes a credible value for ‘goodwill’? Your answer should be in a 4 to 5 paragraph...

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