The raising of funds by selling stocks to the public is called?
-
A.
equity financing -
B.
stock financing -
C.
debt financing -
D.
loan financing
Correct Answer: Option A
Explanation
Stocks are sometimes called equity because the buyer of the stock has part ownership of the company (that initially issued the stock). When a corporation sells stock it is selling an ownership interest in the corporation and raising funds for investment in plant and equipment (for example an initial public offering).