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The primary market is the financial market where new securities, such as stocks and bonds, are issued and sold to investors directly by the issuing company or government entity. It is the initial stage of securities trading, where companies raise capital by issuing new shares through Initial Public Offerings (IPOs) or bonds. The primary market helps companies and governments access funding for expansion or projects, providing an essential mechanism for capital formation.
A tech startup raises capital by issuing new shares through an IPO in the primary market, offering stock directly to institutional investors and the public for the first time.
• The market where new securities are issued and sold to investors.
• Includes IPOs and new bond issuances.
• Provides companies and governments with access to capital for growth and development.
It enables companies and governments to raise capital by issuing new securities, facilitating investment in growth and infrastructure.
The primary market involves the initial sale of new securities, while the secondary market involves trading of existing securities among investors.
IPOs provide companies with access to public capital, allowing them to expand operations and increase visibility in the market.
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