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An Initial Public Offering (IPO) is the first sale of a company's ordinary shares to investors on a public stock exchange. The main purpose of an IPO is to raise capital for the corporation. IPOs can be effective at raising capital, and being listed on a stock exchange requires regulatory compliance and reporting requirements.
IPOs are offered to raise money that the business needs for expansion and/or new business opportunities. By offering shares to investors, companies can use this capital to grow their business. The more successful their business becomes, in turn, the higher the share price is likely to become - generating yet more capital through investors purchasing shares.
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