Final answer:
An initial public offering (IPO) is when a firm sells its own stock to the public for the first time. It provides financial capital to the company and allows for repayment of early-stage investors and expansion of operations.
Step-by-step explanation:
When a firm sells its own stock to the public for the first time, it is called an initial public offering (IPO). This allows the firm to receive money from the stock sale, which provides financial capital. The IPO is important because it enables the company to repay early-stage investors and to fund expansion of its operations.