When a Corporation Uses an Initial Public Offering to Raise

question 146

Multiple Choice

When a corporation uses an initial public offering to raise capital, the stock is sold in the

• A) primary market.
• B) secondary market.
• C) unsecured financing market.
• D) securities exchange.
• E) over-the-counter market.

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Definitions:

Return on Total Assets

A financial ratio that measures a company's ability to generate net income from its total assets, indicating efficiency in asset use.

Total Assets

The sum of all resources owned by a company, valued and reported on the balance sheet, representing the total wealth of the company.

Income Statement

A financial record presenting the financial performance of a company, including its income, expenses, and profit, within a set period.

Gross Margin Percentage

A financial metric that shows the proportion of revenue that exceeds the cost of goods sold, expressed as a percentage. It is used to assess a company's financial health and operational efficiency.