SIE (Securities Industry Essentials) Practice Exam

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When a corporation goes public, it is primarily issuing:

  1. Common stock

  2. Bonds

  3. Preferred stock

  4. Debentures

The correct answer is: Common stock

Going public refers to the process of a private company offering their stock to the public for the first time. This is commonly done through an initial public offering (IPO). When a corporation goes public, it can raise funds by issuing stocks or bonds. However, in this scenario, the primary type of security being issued is common stock. Common stock gives investors ownership in the company and potential for profit through dividends and share price appreciation. Bonds, preferred stocks, and debentures may also be issued, but these are typically used to raise additional funds or provide different terms of ownership for investors.

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