Public Limited Company
Objective of Public Limited Company
Public limited companies (PLCs) are driven by a multifaceted set of objectives aimed at ensuring sustained growth, shareholder value, and transparent interactions with the public. Foremost among these goals is the maximization of shareholder wealth, where PLCs strive to generate profits and enhance the overall value of the company, ultimately translating into favorable returns for shareholders. Access to capital is a pivotal objective, prompting PLCs to offer shares to the public through the stock market, thereby securing substantial funds for strategic initiatives, expansion plans, and ongoing operations. Additionally, PLCs aim to ensure share liquidity, providing investors with the ability to buy and sell shares easily on the stock exchange.
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Advantages of Public Companies
Public companies, or publicly traded companies, have several advantages that stem from their ability to raise capital by offering shares to the public. Here are some key advantages:
Access to Capital: One of the primary advantages of being a public company is the ability to raise capital by issuing shares to the public through initial public offerings (IPOs) and subsequent stock offerings. This provides a significant source of funding for business expansion, research and development, and other strategic initiatives.
Liquidity of Shares: Publicly traded companies benefit from the liquidity of their shares. Since their shares are listed on stock exchanges, investors can easily buy or sell them, enhancing the attractiveness of the company’s stock and increasing its market value.
Enhanced Valuation: Public companies often enjoy higher valuations compared to private companies. The market valuation is determined by the stock price, and a higher valuation can be beneficial for acquisitions, mergers, and attracting top talent.
Employee Incentives: Public companies can offer stock options and other equity-based incentives to employees. This helps attract and retain top talent, aligning the interests of employees with the company’s performance and stock value.
Increased Visibility and Credibility: Being listed on a stock exchange increases a company’s visibility and credibility in the market. This can attract more customers, business partners, and opportunities for collaboration.
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