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What are the advantages and disadvantages of listing shares for trading on an exchange?

What are the advantages and disadvantages of listing shares for trading on an exchange?

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Also, explain the circumstances and ways in which exchanges can withdraw trading privileges.

Asked by Marden, Last updated: Nov 09, 2024

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John Smith

John Smith

John Smith
John Smith

Answered Sep 08, 2016

Advantages of listing shares for trading on an exchange include prestige and goodwill, establishment of market value, increased market visibility, wider distribution of company information, easier valuation for tax purposes and increased investor following.\r\n disadvantages of listing shares for trading on an exchange include additional controls on management, additional costs, visibility of any market indifference, requirement for additional disclosure, and the requirement to provide information to a range of individuals and organizations on a regular basis.\r\n companies must apply and be approved by the exchange(s) prior to listing.\r\n exchanges have the power to withdraw a listed securitys trading and/or listing privileges temporarily or permanently if necessary to protect investors.

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