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Which combination of the following statements regarding secondary market transa...
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Which combination of the following statements regarding secondary market transactions in the capital markets are ALL true?
(1) A very few transactions in the capital market are secondary market transactions and they do not generate cash flow for the organisation.
(2) The securities of an organisation are made more attractive to other investors in a secondary market, thereby increasing the price of the securities.
(3) A secondary market transaction is created when a holder of an organisation’s securities, sell the debt securities to another investor.
(4) The management of an organisation should be aware of the share price as their compensation is often linked to the share price of the organisation.
(5) The level of the organisation’s share price in secondary market transactions will determine how much funds can be raised by future issues of shares.
(a) Statements (1), (2) and (4)
(b) Statements (2), (3), (4) and (5)
(c) Statements (1), (2), (3) and (4)
(d) Statements (1), (2), (3), (4) and (5)