Multistage Dividend Discount Model
The Gordon (constant) growth dividend discount model is particularly useful for valuing the... Read More
Companies issue equity securities in the primary markets to raise capital and increase liquidity. Having public shares also gives the company another currency to make acquisitions with or incentivize employees.
The goal of raising capital is to enhance shareholder wealth. This can be achieved by financing the acquisition of long-lived assets, funding capital expansion projects, supporting research and development, and entering new products or geographic markets. In exceptional cases, capital may be raised solely to sustain a company as a going concern.