Final answer:
A stock broker helps corporations raise money by underwriting the stock offering, taking on the risk of unsold shares. This allows corporations to raise funds for expansion without immediate repayment. Working with a stock broker provides expertise, compliance, and increased visibility for the corporation.
Step-by-step explanation:
A stock broker helps corporations raise money to expand their operations by underwriting the stock offering. Underwriting means that the stock broker guarantees the sale of the stock to investors, helping the corporation raise the needed capital.
By underwriting the stock offering, the stock broker takes on the risk of purchasing any unsold shares themselves. They then sell these shares to investors, earning a commission on each sale. This allows the corporation to raise the necessary funds for expansion without worrying about repaying the money immediately.
Working with a stock broker is beneficial for corporations as it provides them with expertise in the financial markets, ensures compliance with reporting requirements, and increases their visibility in the market.