Corporations that issue financial securities such as stock or debt obligations to the public do so primarily to: A

Business Dec 25, 2020

Corporations that issue financial securities such as stock or debt obligations to the public do so primarily to:

A. increase sales.

B. become profitable.

C. increase their access to funds.

D. avoid double taxation of their profits.

Expert Solution

The correct answer to the given question is option C. increase their access to funds.

The corporations can get access to huge amount of funds provided by retail and institutional investors by issuing financial securities such as stock or debt obligations to public.

The stock holders usually get dividends and the debt holders usually get interest or coupons in exchange for the funds provided.

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