Multiple Choice Questions on With reference to Initial Public Offering consider following statements It provide companies with an........... for UPSC Civil Services Examination (General Studies) Preparation

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Multiple Choice Questions

With reference to Initial Public Offering consider following statements It provide companies with an...........

Economic Affairs Pension and Insurance
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    With reference to Initial Public Offering, consider following statements

    1. It provide companies with an opportunity to obtain capital by offering shares through the secondary market.
    2. It is generally used by new and medium-sized firms that are looking for funds to grow and expand their business.

    Select the correct statement.

    1 only

    Incorrect Answer

    2 only

    Correct Answer

    Both

    Incorrect Answer

    None

    Incorrect Answer
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    Explanation:
    • Recently, The Government has started the process to launch the Initial Public Offer (IPO) of Life Insurance Corporation (LIC).
    • An Initial Public Offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. 
    • Under IPO, an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public.
    • Through an IPO, an unlisted company can get listed on the stock exchange.
    • It is generally used by new and medium-sized firms that are looking for funds to grow and expand their business.

    Hence only statement 2nd is correct.

    By: Shubham Tiwari
    ProfileResources

    Let's Discuss

    Sahil rana

    Statement 1 seems to be wrong, IPO is related to primary market.

    0 0 reply
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