The African Business Review Jan-Feb 2014 | Page 11

profit that is earned, the multiple that the market would be willing to
pay is typically higher than what a private equity fund would pay on
a private transaction. Therefore one of the key motivations for listing
for an entrepreneur would be access to capital.

Besides access to capital, Cyrille Nkontchou also pointed out
another more important advantage that has a far wider reaching effect
for the continent: communication. By virtue of being listed, being
subject to more scrutiny and exposure, a company raises its profile.
A lot of opportunity will flow in the way of a company as a result of
being listed. Stock markets promote growth at the listed firm level,
since the firm is now able to mobilize capital at a lower cost of capital
as risk is shared widely in the market.
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