Question

Which is the primary reason to issue stock?A.To help investors earn higherrate of return B. To rise money to grow the company C. To distribute the risk of bankruptcy across more investors

Answer 1

B. To raise money to a grow a company. 

Stock is equity in a company that is used to help fund the expenses of a company, particularly when they are looking to grow beyond their current revenue sources. It is most useful when a company anticipates growing its revenues or decreasing its expenses through using this new capital in order to deliver a positive return for its equity investors who hold the stock certificates.