New companies sell new issues of stock to obtain

Question

Quizplus · Accepted Answer

New companies typically issue new stocks to raise start-up capital, which is essential for running business operations and achieving growth targets. The company can raise funds from investors by offering them a share in the ownership of the company through stocks. Consequently, the investors become shareholders, and they may receive dividends or enjoy capital gains if they sell the stock for a higher price in the future. Although A, C, and D could also be essential for new companies, raising start-up capital is usually the primary motivation behind new-issue stocks.

New Companies Sell New Issues of Stock to Obtain