Question 27(Multiple Choice Worth 3 points)

(06.04 MC)

Which best explains what it means for a company to sell its stock?

A. Investors are lending the company money, which the company must pay back later with interest.

B. Investors are buying a share of the loans the company has taken from banks. As the loans are repaid, the investors will profit.

C. The company is trading shares of ownership with a business competitor, so that both businesses cannot have too great a loss.

D. The company is selling shares of ownership and a share of its profits in exchange for money it can use to operate its business.