Process of selling company stock at large to general public and get lending from banks is classified as an_________________?
Correct answer: A. Initial public offering
- A. Initial public offering
- B. External public offering
- C. Internal public offering
- D. Unprofessional offering
Explanation
An initial public offering is the first sale of a company's shares to the general public, providing equity financing. It is not technically a bank loan, so the wording about lending from banks is imprecise.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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