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Discuss the different ways in which common stock may be owned.

Discuss the different ways in which common stock may be owned.

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Answer #1


Common stock can be owned in following ways:

1)      Purchasing stocks from open market or secondary market (listed firm). Offer for sale can help investor buying a good amount of stock in listed firms.

2)      Investor can buy stock in Initial Public Offer (IPO) from primary market when firm issues fresh stock (listing firm)

3)      Private equity can be bought by an investor in case firm is not listed on stock exchanges

4)      Venture capital funds can be invested in target company and equity can be acquired

There can be many ways to formulate over the counter deals to own an equity, there is no fixed way for dealing in unorganized market. The first two points i.e. 1st and 2nd point is related organized market above and later two i.e. 3rd and 4th point is common in unlisted firm.

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