The purpose of an initial public offering is to
A)See if there is a demand for a company's new product.
B)Change the membership of the board of directors.
C)Borrow funds for investment and growth.
D)Raise funds for investment and growth by selling shares of the company to the public.

Question

Quizplus · Accepted Answer

The purpose of an initial public offering (IPO) is to raise funds for investment and growth by selling shares of the company to the public. This allows the company to access capital from a wider pool of investors, which can be used to fund expansion, research and development, or other strategic initiatives. The other options - testing demand for a product, changing the board of directors, and borrowing funds - may be important activities for a company, but they are not the primary purpose of an IPO.

The Purpose of an Initial Public Offering Is to