Final answer:
The practice of a firm repurchasing shares at the original sales price in a public offering is rare and not fully detailed in the provided context. Generally, firms raise capital through an IPO, providing financial capital for expansion and repaying initial investors. The rate of return on stocks is realized through dividends and capital gains, not as a fixed promise at the sale.
Step-by-step explanation:
A firm agreeing to repurchase shares at the original sales price in a public offering is a measure sometimes taken to enhance the attractiveness of the stock and potentially sell more securities. This practice isn't very common and isn't clearly described in the provided information. However, what is outlined is the process of a firm raising capital through the stock market. This involves an initial public offering (IPO), where a company first sells its shares to the public, raising funds to repay early-stage investors like angel investors and venture capital firms. The IPO is crucial because it provides the necessary financial capital for the company to expand its operations. After the IPO, the company might issue additional shares through secondary offerings or use treasury stock for various corporate purposes, but these do not typically involve promises to repurchase the shares at initial sale prices. A company does not receive funds when existing shareholders sell their stock to other investors, and it is essential to distinguish between company actions and investor-to-investor transactions.
The rate of return on stock is not a fixed promise when selling stock but rather comes in the form of dividends and potential capital gains, which are subject to market conditions and company performance.