Cost of Capital

liquidity: Tesla's employees and executives had been working for less compensation to minimize the cost to the company. One incentive for Tesla's personnel is that stock options will give them more liquidity and a means to attract and retain key employees.

Secondly, the company goes public to earn credibility. A publicly traded company earns a lot of public exposure, especially when a company can sustain rigorous federal regulations and the cost of compliance requirements. Going public provides a sense of corporate stability. Tesla's S-1 mentions that another principal purpose of the company to issue IPO is to create a public market for the common stock and increase visibility in the marketplace. A public market for the common stock will facilitate future access to public equity markets and raise additional capital to fund manufacturing expansion.

Of the all underwriters of ford in 1956, only Goldman Sachs remains, IPO was worth $660 Million. It was a well established car company when it went public in 1956. when US car industry was peaking.

with Zynga (NASDAQ:ZNGA), and Facebook is expected to raise $5 billion. This money can be critical for hiring more people, building facilities and creating breakout products, and it also can be extremely helpful for making important business-growing acquisitions. However, part or even all the cash might instead go to the existing shareholders, such as the founders, senior executives and investors. One such case is Dunkin' Brands (NASDAQ:DNKN). During its IPO last year, the company's private equity investors -- Bain Capital, Carlyle Partners and Thomas H. Lee Partners -- cashed out shares at a tune of $21 million each.