what does a corporation sell to raise funds?
A) capital B) shares C) mortage d)liability
Answers
Explanation:
Corporations often need to raise external funding, or capital funding, to expand their businesses into new markets or locations, to invest in research & development , pay off debt, or to fend off the competition. And, while companies do aim to use the profits from ongoing business operations to fund such projects, it is often more favorable to seek external lenders or investors.Public companies can raise money via stock exchanges through an initial public offering by issuing additional equity shares, or it could raise debt by issuing non convertible debentures or bonds. In IPO and bonds, both retail and institutional investors can participate. In the case of equity offering, it can be an IPO or a follow on offer if it’s already listed its securities. The company can also raise money through a rights issue to already existing investors. The other route is a private placement where the company issues securities to one large investor like a private equity fund or a select group of pre-identified institutional investors. So there are number of ways in which companies can raise capital.
As mentioned above FPO(Follow on Public Offer) also known as Further Public Offer is one of the methods of raising capital for public companies.