ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In the primary market, organisations offer new stocks and securities to the general society for the first time, for example, issuing shares with an initial public offering (IPO). Therefore a company can raise its capital through any form in the primary market.

Detailed explanation-2: -A company can raise capital through the primary market in the form of equity shares, preference shares, debentures, loans and deposits.

Detailed explanation-3: -The term capital market refers to any part of the financial system that raises capital from bonds, shares, and other investments.

Detailed explanation-4: -Firms can raise the financial capital they need to pay for such projects in four main ways: (1) from early-stage investors; (2) by reinvesting profits; (3) by borrowing through banks or bonds; and (4) by selling stock. When business owners choose financial capital sources, they also choose how to pay for them.

Detailed explanation-5: -The primary market, also called the new issue market, is where issuers raise capital by issuing securities to investors. The secondary market also called the stock exchange facilitates trade in already-issued securities, thereby enabling investors to exit from an investment.