When Ferrari sells stock to the public in its IPO, it will do so through the New York Stock Exchange.This is an example of Ferrari using ________ to raise funds.

Question

Quizplus · Accepted Answer

Direct finance involves a company raising funds directly from investors through the sale of securities, such as stocks or bonds. In this case, Ferrari will be selling stock directly to the public through the NYSE, making it an example of direct finance. Indirect finance involves a financial intermediary, such as a bank, lending money to a borrower, which is not the case in this scenario. Bonds are a form of debt financing and not applicable in this situation. Corporate governance refers to the internal structure and management of a company, which is not relevant to the method of raising funds.

When Ferrari Sells Stock to the Public in Its IPO