Chapman Co. is a privately own.
Chapman Co. is a
privately owned MNC in the United States that plans
to engage in an initial public offering (IPO) of stock so
that it can finance its international expansion. At the
present time, world stock market conditions are very
weak but are expected to improve. The U.S. market
tends to be weak in periods when the other stock
markets around the world are weak. A financial
manager of Chapman Co. recommends that it wait
until the world stock markets recover before it issues
stock. Another manager believes that Chapman Co.
could issue its stock now even if the price would be
low, since its stock price should rise later once world
stock markets recover. Who is correct? Explain.