Question

Which of the following statements about the IPO process is FALSE?

Answer 1

Answer:

B. Companies must seek out private investors for the company.

Explanation:

IPO, in finance, is an acronym that stands for Initial Public Offering. When a private company wants to sell their stocks on the stock market, they go through the IPO process, meaning that they offer shares to the public in a new stock issuance. The IPO process allows the company to raise capital from public investors, not private investors. Companies going through the IPO process have to form a Board of Directors,  establish how much money they want to raise, and come up with a ticker symbol. But they don´t have to seek out private investors for the company.