How do public corporations differ from private corporations?

Public corporations differ from private corporations primarily in their ownership structure and how they raise capital. The correct response emphasizes that public corporations sell shares to the public and are traded on stock exchanges. This means that anyone can purchase shares in these corporations, allowing for broad investment opportunities and access to capital.

Public corporations are required to adhere to strict regulatory standards, including regular financial disclosures to the public and compliance with securities laws. This level of transparency is designed to protect investors and maintain orderly markets. The ability to sell shares to the general public allows these corporations to raise large amounts of capital for growth and expansion.

In contrast, private corporations do not trade their shares on public exchanges and thus have a more limited shareholder base. They typically have restrictions on the number of shareholders and are not subject to the same level of regulatory scrutiny as public corporations. Hence, the answer correctly highlights the fundamental characteristic that distinguishes public corporations, which is their ability to publicly trade shares and attract a wider array of investors.