The first public issuance of a company's shares to investors on a stock exchange to raise capital is known as ________.

Initial public offer

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follow-up offer

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mutual fund

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hedge fund

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Solution

The correct option is A Initial public offer
When the firm decides to operate as a public limited company, the firm will need to offer a portion of its total shares to the public for the first time. This is known as an initial public offering.

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Similar questions

Is it necessary for a public company to get its share listed on a stock exchange? What happens if a public company going for a public issue fails to apply to a stock exchange for permission to deal in its securities or fails to get such permission ?

The directors of a company want to modernise its plant and machinery by making a public issue of shares. They wish to approach stock exchange, while the finance manager prefers to approach a consultant for a new public issue of shares. Advise the directors whether to approach stock exchange or a consultant for new public issue of shares and why? Also advise about the different methods which the company may adopt for the new public issue of shares.

Fill in the blank:

The company which raises its capital by issuing shares to public is a __________.

Q. To get listed in a stock exchange, the company should have issued for public subscription at least the minimum prescribed percentage of its share capital (49 percent).

Q. The Directors of a Company want to modernise its plants and machinery by making a public issue of shares. They wish to approach stock exchange. While the finance manager prefers to approach a consultant for the new public issue of shares. Advise the directors whether to approach stock exchange or consultant for the new public issue of shares and why? Also advise about the different methods which the company may adopt for the new public issue of shares.

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The first public issuance of a company's shares to investors on a stock exchange to raise capital is known as ________.

The correct option is A Initial public offerWhen the firm decides to operate as a public limited company, the firm will need to offer a portion of its total shares to the public for the first time. This is known as an initial public offering.

The correct option is A Initial public offer
When the firm decides to operate as a public limited company, the firm will need to offer a portion of its total shares to the public for the first time. This is known as an initial public offering.