ANSWER

1. Why convert a private limited company to a public limited company? a. Fund Raising is easy to access from bank

b. High market recognition by giving confidence to stakeholders

c. A private ltd company might change into a plc if it desires to raise more capital for its business.

Whenever a ltd company is converted into a plc it’s allowed to put its share in public and on stock exchange i.e. it can now sell the shares not just to its friends and family but anywhere around the world, though the effect on control and ownership might be dilution of control.

The ease of buying and selling of shares for shareholders - this encourages investment in plcs.

2. What are the activities in primary market?  Initial Profit Offering

 An initial profit offering (IPO) marks the first time a company sells its stocks or securities to investors directly. In the world of finance, the term \"security\" means that a company or government agency sells the right to share in its profits. For example, if Company A sells its stock to Investor B through an IPO, Investor B now has a right to a portion of Company A's profits. Afterwards, Investor B can sell his share of the company to another investor but not on the primary market.  An Information Exchange

 In addition to being a place where IPOs are sold, the primary market also acts as a

source of information. If an investor seeks new opportunities, he will only find out about them on the primary market. Even before a company launches an IPO, news of its preparation circulates throughout primary markets. Investors then have the chance to determine whether a new company is a worthy investment or not.  Primary Markets as Growth Engines

 Without investment from individuals or governments, a country's economy can not grow. Such investment is known as capital in the world of finance. Primary markets provide an opportunity for investors to help the economy grow by enabling them to support new ventures. In turn, these new ventures can provide employment as well as profit. Stock holders can use their profits to invest in more new enterprises. Through investment on the primary market, the economy can grow healthy and robust.

3. What are the activities in secondary market?

a. Investors trading among themselves without the previous issuing companies' involvement

b. For example, if you go to buy Microsoft stock, you are dealing only with another investor who owns shares in Microsoft. Microsoft (the company) is in no way involved with the transaction.

4. Examples of primary market and secondary market. a. Primary market -- IPO occurs

b. Secondary market

-- Auction market in New York Stock Exchange (NYSE)