Capital MarketsQuestion 303 of 398
A company is selling its shares to the public for the very first time. This event is best described as a(n):
a.Initial public offering (IPO)
b.Follow-on (additional) offering
c.Secondary market transaction
d.Private placement
Explanation
An initial public offering, or IPO, is the first time a company sells its stock to public investors. A follow-on offering occurs when an already-public company issues additional shares.
Practice all 398 questions free — no signup required.
Related questions on this topic
- An investor buys 100 shares of an already-public company from another investor on an exchange. This transaction takes place in which market?
- What is the primary purpose of the Securities Act of 1933?
- Which federal law created the Securities and Exchange Commission (SEC) and gave it authority over the secondary market?
- In a firm-commitment underwriting, what role does the investment bank (underwriter) take on?
- Under a best-efforts underwriting, what happens to shares that the syndicate cannot sell?
- Several broker-dealers join together to share the risk and distribution responsibilities of a large securities offering. This group is called a(n):
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against FINRA Securities Industry Essentials (SIE) Exam · How we review