Which of the following is considered a primary market transaction?
A) A firm sells stock to the public for the first time in an IPO.
B) An investor buys stock in Chrysler Canada from his buddy.
C) Chrysler Canada's stockholders sell some of their shares to an activist investor.
D) On September 25, 1995, 30.8 million shares of stock changed hands on the TSX.
E) Labatt's just announced what their upcoming quarterly dividend payment will be.

Question

Quizplus · Accepted Answer

A primary market transaction involves the original issuance of securities by the issuer to investors. An IPO (Initial Public Offering), where a firm sells stock to the public for the first time, is a classic example of a primary market transaction. Choices B, C, D, and E all describe secondary market transactions or corporate actions unrelated to the issuance of new securities.

Which of the Following Is Considered a Primary Market Transaction