SIE practice questioneasyInitial Public Offering
An initial public offering (IPO) is best described as:
- AThe repurchase of shares by a public company
- BThe sale of additional shares by a company that is already publicly traded
- CThe first time a company sells its shares to the public✓ Correct answer
- DA private placement of securities to accredited investors
Explanation
Why C — The first time a company sells its shares to the public
An IPO is the first time a company offers its shares for sale to the general public. A follow-on offering sells additional shares after a company is already public, a private placement is sold privately under an exemption, and a stock buyback is a repurchase by the issuer.
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