CAT / FIA FFM Syllabus C. Managing Cash Balances - Reasons for a stock exchange listing - Notes ^{13 / 13}

Access to a wider pool of finance
The level of finance available to a private unlisted company is limited.
Therefore, if a company needs more finance than is currently available to it, it may seek a stock exchange listing.
A stock exchange listing may also improve the company’s credit rating, meaning that more investors are willing to invest in it.
Enhancement of the company’s image
A company’s image is generally improved when it becomes listed, as it is perceived as being more financially stable.
This may result in increased custom and increased buying power.
Increased marketability of shares
It is not very easy for a shareholder in a private company to sell their shares.
Once a company is listed on the stock exchange, its shares become far more marketable, thus making them far more attractive.
Facilitation of growth by acquisition
Should a listed company wish to make an offer to takeover another company, they are in a much better position to do so than in an equivalent unlisted company.
This is because the terms of the offer will probably include an exchange of the shares in the acquiring company for those of the target company.
Transfer of capital by the founder owners
A stock exchange listing gives the founder members more opportunity to sell their shareholding, or part of it, leaving them free to invest in other projects.