Question

A corporation can pay a brokerage house to issue its stock. Some brokerage houses underwrite an indirect issuance of stock; they buy the stock from the corporation and resale it to investors.

Answer 1

Answer:

True.

Step-by-step explanation:

A corporation is a business entity established by law, distinct from it's owners. The owners are either called shareholders or stockholders while their entities can owned privately or publicly. A corporation can sell it's stocks directly by advertising them to potential buyers or indirectly through a brokerage firm, meaning that the corporation would pay a brokerage firm to issue its stocks.

Brokerage firms are financial institutions that helps individuals, firms to buy and sell securities- shares, stocks,Treasury bills, bonds etc. They are licensed by the Securities and Exchange Commission(SEC) hence are employed by firms to represent investors who buys and sells public stocks. They engage in market research thereby giving professional advice to their clients in terms of investments decisions. In addition to this, some brokerage firms underwrites an indirect issuance of stock; they buy the stock from corporation and resale it to investors.