Final answer:
IPOs, SPOs, and APOs all occur in the primary market, where new securities are initially sold. The primary market facilitates capital formation for companies.
Step-by-step explanation:
IPOs (Initial Public Offerings), SPOs (Secondary Public Offerings), and APOs (At-the-Market Offerings) are all different methods a company can use to go public or to raise additional capital after it has already gone public. These financial events occur in the primary market, which is where new securities are issued and sold for the first time. Following are the market types:
- IPO: A company sells shares to the public for the first time.
- SPO: Existing shareholders sell their shares to the public.
- APO: Companies sell new shares directly into the secondary trading markets at prevailing market prices, over time.
The primary market plays a crucial role in capital formation for businesses, as it enables them to raise the funds needed for expansion, debt repayment or other corporate activities. It is distinct from the secondary market, where investors trade previously-issued securities without the involvement of the issuing companies.