Publicly held corporations can obtain additional funds by issuing new common stock.A. TrueB. False

Answer

A. True

Publicly held corporations can indeed obtain additional funds by issuing new common stock. When a corporation decides to raise capital, one of the primary methods it can utilize is to issue new shares of common stock to the public or existing shareholders. This process involves creating and selling additional shares, which can bring in significant financial resources that can be used for various purposes—such as expanding operations, paying down debt, or funding new projects.

The issuance of new stock helps increase the equity base of the corporation, allowing it to leverage this new capital for growth opportunities. However, it's important to note that issuing new shares can dilute the ownership percentage of existing shareholders since the total number of outstanding shares increases. This strategy is commonly employed, especially during times when companies are looking to expand or when they need to strengthen their balance sheets.