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Why do we need stock markets

Geoff Riley

19th October 2008

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A feature on the roles that capital markets play written by Alec Chrystal and available on the BBC website - the answer according to Chrystal lies with asking another question - why do we need limited companies who can then list on a stock market as a means of broadening their ownership and raising fresh capital:

“The benefit to companies from having their shares publicly traded is that they can issue new shares to raise capital for future investment. The only alternative source of funding would be to increase debt (by borrowing more from banks or issuing bonds).”

The rest of his article is here

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Geoff Riley

Geoff Riley FRSA has been teaching Economics for nearly forty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD and Revision conferences in the UK and overseas.

@tutor2uGeoff

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