Question : Case Study 23:
GHI Inc. is a technology startup looking to raise funds for its expansion into new markets.
Question :
GHI Inc. wants to raise capital for its expansion into new markets. What type of market activity would be relevant in this context?
Option 1: IPO (Initial Public Offering)
Option 2: Currency swap
Option 3: Mergers and acquisitions
Option 4: Treasury bill trading
Correct Answer:
IPO (Initial Public Offering)
Solution : The correct answer is (a) IPO (Initial Public Offering)
An IPO is the process through which a private company goes public by offering its shares to the public for the first time. This allows the company to raise significant capital by selling ownership stakes (equity) to investors. Going public through an IPO is a common method for companies to secure funding for expansion and entry into new markets.
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