Which of the following occurs when a company has an initial public offering?

When a company has an initial public offering (IPO), it issues new shares to the public for the first time. This process allows the company to raise capital by selling equity to a broad base of investors. The funds raised from the IPO can be used for various purposes, such as funding expansion, paying off debt, or investing in new projects. An IPO transforms a private company into a publicly traded one, enabling it to access the capital markets for future financing.

Trading of existing shares typically occurs after an IPO has taken place and the shares are available on the stock exchange, which is not the primary function of an IPO. Bond financing is unrelated to the issuance of shares, as it pertains to debt securities rather than equity. Lastly, entering bankruptcy signifies financial distress, which is the opposite of the goal of an IPO, as companies undertake IPOs to improve their financial standing and growth potential.