₦airaland Forum

Why you should take your company to the stock exchange

If you are a company that is a going concern and after paying yourself and workers, you can claim a profit of 100 million naira per annum before doing any debt servicing, then your company can certainly be assigned a market capitalization of three billion naira if it is a typical company on the NGX. If it were a big company that does share buy backs like Apple Inc or Meta Inc, it can be valued at 30 billion naira with that 100 million naira growth per annum and if it were Microsoft Inc a big company consistent in paying dividends that does not buy back shares it can be valued at ten billion naira but most listed companies that are smaller will be around the range of three to ten billion naira even on the New York stock exchange

However what can't be doubted is that your company that can pay one hundred million naira dividends per annum can certainly be valued at three billion naira. You might be owing five hundred million naira at fifteen percent per annum to banks which means you have to pay 75 million naira per annum in interests.

What you need to do to upgrade yourself and business is to sell half of your company at 1.5 billion naira and such an offer will be over subscribed meaning you will need to return money. It will be over subscribed because the three billon naira investment can pay far more than two percent per annum and it will also be oversubscribed because your company is known and it has a track record of paying workers salaries and making profit. When the money is collected, you pay off your 500 million naira debt and use the remaining one billion naira to scale up your business maybe three to four times and you will be able to be making at least four hundred million naira dividends to be paid out annually after all expenses while your own benefit as founder will substantially increase with you still holding half of the equity.

Get your business listed on the stock exchange today!

Note
A business making 100 million naira per annum after expenses may not have more than 300 million naira invested in tangible assets and much less if it is using a patent

Explain it the way a primary school pupil would understand it.
You explained it like you were in a hurry to prove a point. You actually did, but kindly rephrase. Thanks

Wealthyonos:
Explain it the way a primary school pupil would understand it.
You explained it like you were in a hurry to prove a point. You actually did, but kindly rephrase. Thanks

Ok. The meaning is that if you have invested 3 million naira in a business and you can save 1 million naira every year then you can sell your company to the public at 30 million naira which means anybody that brings 15:million naira will be equal to you in decision making and profit sharing. You will then use the 15 million naira to scale up your company five times. Do you understand now?

Note

If you bail out at this point (which you won't) from the management, you can ask for dividends to be paid and you will collect 7.5 million naira cash theoretically while still being a sleeping partner entitled to half the profits

lawani:
Ok. The meaning is that if you have invested 3 million naira in a business and you can save 1 million naira every year then you can sell your company to the public at 30 million naira which means anybody that brings 15:million naira will be equal to you in decision making and profit sharing. You will then use the 15 million naira to scale up your company five times. Do you understand now?..

Well understood. Thanks