An initial public offering (IPO) occurs

Question: I have a question about the stock market. I've never understood and always puzzled about something extremely basic and fundamental about how the stock market works. According to my understanding, a firm issues a certain number of shares, and the value of those shares is determined by supply and demand. However, it appears that I, and anybody else, can purchase or sell any number of shares at the present stock price at any time. So, what is the mechanism that influences the price of a stock? If I check at the stock price of business X and find that it is selling for $100 a share, I, like anyone else, can pick whether to buy one share for $100 or one million shares for $100. So, what causes the stock price of firm X to rise or fall to $100.01 per share or $99.99 per share? The stock price does not appear to move up unless all available shares have been purchased, nor does it appear to move down unless there are persons prepared to sell shares for less than the market asking…

Repurchased shares which a company has bought back from stockholders with the intention of reissuing at a later date are known as: Select one: a. capital shares. b. treasury shares. c. inventory shares. d. unissued shares. e. preferred shares.

Briefly explain the term initial public offering (IPO). Why would a company choose to go public?