Primary Equity Markets And Secondary Equity Market Essay

IPO is a part of equity financing. Equity financing is when a company decides to give up ownership in the company to raise funds. This is usually done by selling

* Capital raised in an IPO can be used to pay off debt and thus reduce the interest costs and enhance the company’s debt to equity ratio

The NASDAQ constitutes its market type in a deal form for securities market, dealers sell stocks directly to firms or investors through the telephone or the internet, In the same way the NYSE constitutes an auction

Currently there are over one hundred unique stock exchanges throughout the world. A Stock exchange provides a means for companies to raise capital through issuing stock. This process begins when a private company files to issue

II. Should customers be given 30 or 45 days to pay for their credit purchases?

If an investor sells shares of stock through a broker, then it would be a primary market transaction.

Equity financing, aka investment, differs from debt financing in that rather than require repayment of the money, on a monthly basis, the money provided for financing is exchanged for a percentage of the business (Mikic et al., 2016). The premise is that with time and business expansion, the value of the business will sufficiently increase to repay the initial investment and provide profits to the investor (Shah & Thakor, 1988). The fiscal exchange typically occurs through a liquidity sale or initial public offering (IPO) (Mikic et al., 2016). This form of lending steps outside the traditional format and increases options for the entrepreneur.

Whenever companies need more money to open new business they either take out a financial loan or they have to present and issue their shares on the stock markets. Instead of a company raising capital for a business they can in-return issue shares because they have part ownership of the company. This is all considered to be the primary role of the stock market. The secondary role of the stock market is a market that plays an important role as the basic stool step for both, buyers and sellers to interact in exchange for shares. It is where investors go to buy and sell stocks that are to be traded on the market exchange.

A stock market is also known as an equity market. A market is an open market for the trading of company-held stock as well as their derivatives at a consented price. It is a large network of several thousands of money-making transactions. It does not have a physical existence as an entity. But at one fell swoop the stocks are listed on an actually accessible unit known as the stock exchange.

The U.S. equity markets are characterized by its players and components. Both individuals and institutions are its customers. The size of institutions is an element used for their categorization, between retail and institutional customers \citep{AHFT}.

Given the size of the capital raised through public offering, it could be a tedious task to raise same amount of capital in private placements.

An equity market is the general place where stocks are sold. The New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations System (NASDAQ) are two examples of equity markets. The market in which shares are issued and traded, either through exchanges or over-the-counter, is also known as the stock market. Investors bid for stocks by offering a certain price, and sellers asking for a specific price. When these two prices match, a sale occurs. Trading in the equity market is the cornerstone of a capitalistic economy because it helps facilitate capital formation and liquidity for entrepreneurs and businesses.

IPO stands for initial public offer; it is offered by a new publicly listed company of share, and occurs when a company goes from being privately held to publicly owned with shares trading on stock market. IPO could fund for new companies. It’s a cheaper way to raise funds than issuing bonds and borrowing from banks, but required funding will not be raised when people don’t buy its share (Viney 2015). Although Australian IPO is not as stable as in China, always increasing in the first a few days, it still attracts many investors.

As I began to do research on IPO’s, I wanted to make sure that I had a clear understanding of what exactly an IPO was. Initial Public Offering can be defined as the first sale of stock by a formerly private company. An IPO (Initial Public Offering) can be used by either small or large companies to raise expansion capital and become publicly traded enterprises. Many companies that undertake an IPO also request the assistance of an Investment Banking firm acting in the capacity of an underwriter to help them correctly asses the value of their shares, that is, the share price. http://www.ipoinitialpublicofferings.com/ipo-definitions.htm#Initial_Public_Offering2

‘the possibility that an IPO issuer fails to sell a certain number of shares to investors at the offering price’