A ________ is MOST likely to raise capital by offering shares of stock to stockholders.

• A. Corporation
• B. Nonprofit organization
• C. Partnership
• D. Sole proprietorship

Answer: (A)

The essential idea here is how different business forms raise capital and the role of issuing stock. A corporation is designed to raise funds by selling shares of stock to stockholders, which brings in equity capital from many investors and spreads ownership. This stock issuance is a defining feature that enables corporations to access large pools of money for growth while allowing investors to own a portion of the company. Nonprofit organizations don’t issue stock because they don’t have owners who hold shares; they rely on donations, grants, and earned income instead. Partnerships and sole proprietorships don’t issue stock either—ownership is held by individuals or partners, and they typically raise funds through loans or by bringing in additional partners, not by selling stock. So, the entity most likely to raise capital by offering shares of stock to stockholders is a corporation.