Question

Apple Tree Inc. is looking for capital to grow their young business. After much research Apple Tree has decided to "go public". Based on this information, which of the following statements is correct?

a. Apple Tree will stand at Wall Street and sell shares to those walking by.
b. Apple Tree will begin trading on the secondary market immediately.
c. Apple Tree will issue an IPO throught the primary market.
d. Apple Tree will borrow money with a low interest rate from a venture capitalist.

Answer 1

Apple Tree Inc. will issue an IPO through the primary market.

Step-by-step explanation:

Based on the given information, Apple Tree Inc. is planning to go public in order to raise capital for their growing business. Going public means that the company will issue an Initial Public Offering (IPO) through the primary market. In an IPO, the company sells its own stock to the public for the first time, allowing individuals, mutual funds, insurance companies, and pension funds to invest in the company by buying shares. This provides the company with the funds needed for expansion and allows early-stage investors, like venture capital firms, to sell their ownership of the company to the public.