Assignment 1: Impact of the Sarbanes-Oxley Act (SOX) Due Week 3 and worth 280 points
Assume that you are a CEO of a medium-sized company that needs a significant influx of cash for several expansion projects. As the CEO, you must determine whether your company should remain private or go public. Some companies postpone going public due to the unpredictability of economic and market conditions. Consider the ramifications of both alternatives. Construct an argument for and against going public. Before providing your response, review the guidelines and regulations associated with going public by visiting Small Business and the SEC located at http://www.sec.gov/info/smallbus/qasbsec.htm.
Write a four to five (4-5) page paper in which you:
Outline three (3) ways in which your medium-sized private company may benefit from going public, providing a rationale for each.
Create an argument that the same goals may be achieved if the company remains a privately held entity. Provide support for your argument.
When a company decides to go public, it can typically obtain capital by issuing stocks or bonds. Suggest four (4) leading financial ratios that will be evaluated and how each will impact the company’s decision to obtain expansion funds. Determine whether the results of the ratios would alter the decision to go public.
By researching the results of SOX compliance surveys, assess the financial impact that SOX might have on your company if it decides to go public. Considering the impact of SOX compliance, take a position as to whether your company can overcome the challenges posed by SOX compliance if the decision is to go public. Based on your research, support your decision by identifying the potential advantages and disadvantages that SOX may have on your company. Provide specific examples.
Make a recommendation as the CEO regarding the alternative (i.e., going public or staying private) that will best support the company’s expansion goals. Support your position.
Use at least four (4) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources.
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