Question

Listing requirements and why? Why do firms list their shares on a stock exchange FDIC: what is it?

Answer 1

Answer a

Listing requirements: The different exchanges set their own standard listing requirements which the company needs to comply before a company can begin trading on the exchange. The SEC does not prescribe any listing standards. The companies need to meet certain financial and non-financial standards like stock price, market value, no of shareholders and no of publicly traded shares, etc before being listed.

Advantages of listing shares

-Money can be raised from public at a cheaper rate as compared to borrowings

-by listing the risk of ownership is spread over the large no of shareholders

-listing increases the credibility of the company in the eyes of the public

- listing help raise additional debt from the banks and financial institutions while maintaining the acceptable debt equity ratio

Answer b.

FDIC stands for Federal Deposit Insurance Corporation. FDIC provides deposit insurance to the depositors depositing money in the US depository institutions. The other agency is National Credit Union Administration.