Question

Wally's Wonderful Widgets is owned by its founder, Wally, and has several hundred employees who produce a number of useful goods. The company wants to publicly sell shares of ownership in the company in exchange for money to expand business. To which economic institution would Wally's Wonderful Widgets turn? A)Stock market B)Federal Reserve C)Local credit union D)Local bank

Answer 1

Wally's Wonderful Widgets would turn to A. the stock market.

Answer 2

The correct answer is A.

Shares are documents which entitle their holder to participate in the ownership of a certain company, in the same proportion as the number of shares he possesses represent out of the total social capital. Stocks also confer the right to receive dividend payments if the company is able to generate profits.

When a corporation issues stock to expands its business, such financial tittles are offered in the stock markets, where investors can come to purchase them.