The raising of funds by selling stocks to the public is called?

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).

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