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A private company wants to expand its operations - HSC - SSCE Business Studies - Question 19 - 2024 - Paper 1
Question 19
A private company wants to expand its operations. To raise funds, it intends to become a public listed company. What name is given to this form of equity finance? ... show full transcript
Worked Solution & Example Answer:A private company wants to expand its operations - HSC - SSCE Business Studies - Question 19 - 2024 - Paper 1
Step 1
What name is given to this form of equity finance?
Answer
The correct answer to this question is C. New issue of shares. When a private company decides to expand by becoming a public listed company, it accomplishes this through selling new shares to the public. This is a common method for raising capital, as it allows the company to access a broader range of investors and increase its equity base.