Which best describes why a company issues stocks? A. To increase the company’s value
B. To ensure profits
C. To increase dividends
D. To raise capital
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Which best describes why a company issues stocks? A. To increase the company’s value
B. To ensure profits
C. To increase dividends
D. To raise capital
The correct answer is D. To raise capital.
When a company issues stocks, it sells shares to investors in order to raise capital. This capital can be used for various purposes such as expanding the business, funding research and development, or paying off debt. While increasing value and ensuring profits might be goals of the company, the primary reason for issuing stocks is to acquire funds needed for operations and growth.
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