Question

a successful ride - sharing company has decided to raise money for its second phase of expansion by issuing shares of stock and becoming a publicly - traded company, so they create a prospectus for potential investors. what type of stock market transaction is taking place? ○ secondary market offering ○ share buyback ○ private placement ○ ipo

Explanation:

1. Analyze each option:

• Secondary market offering: Involves trading existing shares, not new issuance for expansion. Eliminate.
• Share buyback: Company buys its own shares, not issuing to raise money. Eliminate.
• Private placement: Issuing shares to a select few, not becoming publicly - traded (which involves broader public offering). Eliminate.
• IPO (Initial Public Offering): When a private company issues shares to the public for the first time to raise capital (like for expansion) and becomes publicly - traded. This matches the scenario.

Answer:

D. IPO