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Reading 58: Overview of Equity Securities-LOS g 习题精选

Session 14: Equity Analysis and Valuation
Reading 58: Overview of Equity Securities

LOS g: Explain the role of equity securities in the financing of a company's assets and creating company value.

 

 

The primary reason for a firm to issue equity securities is to:

A)
improve its solvency ratios.
B)
increase publicity for the firm’s products.
C)
acquire the assets necessary to carry out its operations.


 

While issuing equity securities can improve a company’s solvency ratios and increase the firm’s visibility with the public, the primary reason to issue equity is to raise the capital needed to acquire operating assets.

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