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ou should show your understanding in your own words, rather than simply oping or quoting directly from the book or other sour
(b) What does it mean to float a company? What is the purpose to float a company?
(Maximum: 300 words)
Course：Financial Makets and Institutions
ou should show your understanding in your own words, rather than simply oping or quoting directly from the book or other sources.
(b) What does it mean to float' a company? What is the purpose to float a company?
(Maximum: 300 words)
business   finance   
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Answer #1

To float a company means to issue shares of the company which are to be traded in the stock market.The float helps in determining the percentage of shares available for trading . Higher the number of shares floated lower will be volatility or price fluctuations and lower the number of shares higher will be the volatility.The reason is that when stocks traded then there will be price movements in case of higher floating shares.
The purpose to float a company is to get access to capital to fund projects, expansion of projects , buy back debt,etc used by companies.It also helps in maintaining liquidity in secondary market. It also increases the brand value of a company and more people know about the company.

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