Why is it sometimes cheaper for firms to sell stock privately than pub

QUESTION

Why is it sometimes cheaper for firms to sell stock privately than publicly?

What will be an ideal response?

ANSWER

Answer: Firms may find they can sell stock more cheaply when they sell it privately because there is less government regulation involved.
Explanation: As there is more government regulation involved in selling stock publicly, that usually means higher costs to the firm selling the stock; therefore, selling it privately can often be cheaper.