If Pirate Recording elects to offer an Initial Public Offering (IPO), it will involve preparing full financial disclosure with the ________. The firm is advised to solicit the services of an investment banker/underwriter, who will analyze the market and determine the best price for the new issue of Pirate Recording stock. The offering will then be sold on the ________.

Question

Quizplus · Accepted Answer

The Securities and Exchange Commission (SEC) is the regulating body of all publicly traded firms. By preparing an Initial Public Offering (IPO), Pirate Recording would be selling common stock to the general public, allowing several other investors to own a part of the firm, with voting rights. A new issue of stock, on an IPO, is sold on Primary Market. When the entire issue is sold, Pirate Recording would get its needed funding.

If Pirate Recording Elects to Offer an Initial Public Offering