Question

For a business to grow, prosper, and create economic opportunity, many people have to be willing to invest money in it. An advantage of a corporation is its ability to raise money through the sale of

Answer 1

Corporates raise money through selling their shares. The correct answer is shares. By selling the shares, the corporates get an opportunity to grow, prosper and create economic opportunity.

Why do Corporates sell shares?

All businesses require capital to function. Selling shares in a sale of ownership can be done for a variety of reasons, including debt consolidation, funding business expansion, or risk diversification. Selling shares in a company might bring in a sizable sum of money that can be put toward debt repayment, investments, or charitable contributions. The money may also be reinvested in the company to finance growth. Similar to how selling a portion of a company can lower risk and help owners diversify their own holdings.

Other factors may also motivate business owners to sell their shares. Selling shares gradually can help you plan for eventual succession and transfer ownership in a way that will cause the eventual new owners to experience the least amount of tax shock possible. Finally, selling shares in a company can be the result of burnout or a refusal to expand the company further.

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