When a company needs capital to purchase inventory, expand a plant, make major investments, acquire another firm, or pursue other business goals, it may sell a bond or stock issue to the investing public. This is done in which market?
A) primary market
B) secondary market
C) government market
D) supermarket

Question

Quizplus · Accepted Answer

The primary market is where companies sell new securities to the public for the first time. This is done through an initial public offering (IPO) or a bond offering. The purpose of the primary market is to raise capital for the issuing company. In contrast, in the secondary market, existing securities are bought and sold between investors.

When a Company Needs Capital to Purchase Inventory, Expand a Plant