Question

A secondary offering is when shares are issued by a:

Group of answer choices

A Venture Capital Firm

Private Equity Firm

Public Firm

Start-Up Firm

Private Firm

Answer 1

Option C is correct

A secondary offering is when shares are issued by a Public Firm. The shares of a public company are bought and sold between the investors on the secondary market (stock market) in a secondary offering. The public firm do not get cash in a secondary offering transaction. The existing investors gets cash for selling their shares.

The other answer options are incorrect because they are all private firms and any offering by them would be considered primary offering. The offerings from Venture Capital Firm, Private Equity Firm, Start-Up Firm, and Private Firm are called primary offering, in which the firms get cash for selling part of their business.