Which of the statements below is TRUE?
A)Buying of shares is the selling of ownership in the company.
B)A company is said to go "private" when it opens up its ownership structure to the general public through the sale of common stock.
C)Private companies can go public by choosing to sell stock to attract permanent financing through equity ownership of the company.
D)Most companies have the resident expertise to complete an initial public offering (IPO),or first public equity issue.

Question

Quizplus · Accepted Answer

Private companies can choose to go public by selling stock to the general public in order to obtain permanent financing through equity ownership. Option A is incorrect as buying shares means buying ownership in the company, not selling it. Option B is incorrect as going public means opening up ownership structure to the public through sale of common stock, not going private. Option D is incorrect as completing an IPO requires specialized expertise and many companies may need to enlist the help of investment banks or other professionals.

Which of the Statements Below Is TRUE