What might happen during a secondary market transaction?

In a secondary market transaction, shares of a company are traded among investors after the initial issuance in the primary market. This means that the original issuer of the shares does not receive any proceeds from these transactions. Instead, the focus is on the current shareholders selling their shares to new buyers or other existing shareholders.

The involvement of a third party selling their shares without the issuer comprises a fundamental characteristic of secondary market activities. In this scenario, the seller might be an existing shareholder who wishes to liquidate their investment, and the transaction occurs on an exchange or over-the-counter market without any direct involvement from the company itself. This is why option C is accurate and reflects the nature of secondary market transactions.

On the other hand, the other choices do not accurately represent secondary market activities. The issuer does not benefit from the proceeds of secondary transactions, the trading does not occur solely among existing shareholders as it can include new buyers, and new shares issuance pertains to the primary market rather than the secondary market. Thus, option C encapsulates the essence of what occurs during these transactions effectively.