When Shares of Stock Are First Sold to the Public

question 49

Multiple Choice

When shares of stock are first sold to the public and begin trading on a stock exchange, it is referred to as _____.

• A) venture capitalism
• B) equity financing
• C) angel investing
• D) an initial public offering
• E) crowdfunding

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Definitions:

Accounts Payable

The amounts owed by a business to its suppliers or creditors for goods and services received but not yet paid for.

Note Payable

A written agreement where one party promises to pay another party a specific sum of money, either on demand or at a set future date.

Regulatory Agency

A governmental organization tasked with creating and enforcing rules to regulate and supervise specific industries or activities.

Internal Revenue Service

The federal agency responsible for enforcing U.S. tax laws and collecting taxes.