Final answer:
The original sale of securities by corporations occurs during an initial public offering (IPO), where companies raise capital by selling stock directly to the public. After the IPO, the firm's stock is traded on the secondary market. A company's decisions are made by a board of directors, elected by the shareholders.
Step-by-step explanation:
The original sale of securities by corporations happens on the primary market, specifically during an event called an initial public offering (IPO). During the IPO, a firm sells its stock directly to the public, which includes a variety of investors such as individuals, mutual funds, insurance companies, and pension funds. This first public sale is crucial as it allows the firm to raise capital necessary for various purposes, such as repaying early-stage investors like angel investors and venture capital firms, or for the expansion of the company's operations. Post-IPO, the company's stock is then traded on the secondary market by individual investors without the company receiving further capital from these transactions.
It's important to note that when a company sells its stock, it does not promise a fixed rate of return. Instead, shareholders have the potential for capital gains based on the company's performance and stock price appreciation. Company decisions are typically made by a board of directors, which is elected by the shareholders.