Question

An initial public offering (IPO):

Question 6 options:

	occurs whenever a company buys back its stock on the open market.
	occurs when common stock is given a special designation such as Class A or Class B.
	occurs when a companys stock is offered to the public for the first time.
	occurs when shares of a company are traded in the secondary market.

Answer 1

The Answer will be C) occurs when a company’s stock is offered to the public for the first time.

Initial Public offering as the name suggest the first offering to public. So when the Company offers its stock for the first time to public in an exchange is called IPO.

Option A is invalid as because Buyback means taking back the shares from market. And IPO is offering the shares.

When we issue to a special class it is a private offering not public offering and hence option B is also invalid.

Option D is invalid because IPO is regulated by exchange with issues of proper Prospectus and showing true and fair facts to public then only exchange will allow for IPO.