IPOs lead to higher costs for public companies

11/20/2011 | CFO.com

An initial public offering adds an average of $2.5 million to a company's operating costs annually, according to a study by Ernst & Young. Most of the spending goes to compensating chief financial officers and other executives, as well as consultants and investor-relations professionals. Being accountable to investors can also put constraints on executives' decision making. Still, having access to much-needed capital justifies the added expenses, companies say.

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