Question : Case Study 21:
ABC Enterprises is a startup in the renewable energy sector aiming to raise funds for its innovative projects.
Question :
ABC Enterprises is looking to raise capital for its renewable energy projects. Which type of market activity would be associated with this goal?
Option 1: Primary market
Option 2: Currency swap
Option 3: Mergers and acquisitions
Option 4: Secondary market trading
Correct Answer: Primary market
Solution : The correct answer is (a) Primary market
In the primary market, companies issue new securities, such as stocks or bonds, to raise funds directly from investors. ABC Enterprises would be initiating this process by offering its innovative projects' securities to investors for the first time, generating the necessary capital to support their renewable energy initiatives.
To fund its renewable energy projects, ABC Enterprises is considering issuing bonds. What type of financial instrument is this?
Option 1: Corporate bond
Option 2: Equity share
Option 3: Treasury bill
Option 4: Debenture
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