Abstract: The primary market is where securities get created. Unlike the secondary markets, primary markets raise money on behalf of companies or governments. There are a number of different processes that can be used to raise capital in the primary market. These processes illustrate capital-raising activities. The primary market is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate of securities dealers. The process of selling new issues to investors is called underwriting. In the case of a new stock issue, this sale is an initial public offering (IPO). Dealers earn a commission that is built into the price of the security offering, though it can be found in the prospectus. Primary markets create long term instruments through which corporate entities borrow from capital market.
Publication Year: 2011
Publication Date: 2011-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
Access and Citation
Cited By Count: 4
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