ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -For example, company ABCWXYZ Inc. hires five underwriting firms to determine the financial details of its IPO. The underwriters detail that the issue price of the stock will be $15. Investors can then buy the IPO at this price directly from the issuing company.

Detailed explanation-2: -The Primary Market An initial public offering, or IPO, is an example of a primary market. These trades provide an opportunity for investors to buy securities from the bank that did the initial underwriting for a particular stock. An IPO occurs when a private company issues stock to the public for the first time.

Detailed explanation-3: -An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. It is the largest source of funds with long or indefinite maturity for the company. An IPO is an important step in the growth of a business. It provides a company access to funds through the public capital market.

Detailed explanation-4: -Primary market example of securities issued includes notes, bills, government bonds or corporate bonds as well as stocks of companies.

Detailed explanation-5: -A major component of the primary market is the IPO. It is a place where already issued or existing shares are traded. It is called After Issue Market. The amount received from the issue of shares goes to the company for their business expansion purposes.