Common stocks and preferred stocks
Different categories of stocks can be issued, with unequal voting rights (common stocks, preferred...). Preferred stocks has a preference in payment of dividends and in the assets of the corporation in the event of liquidation. It looks like a debt in some regards
Shares are usually issued at a higher price than their par value, with a surplus. Total par value = dedicated capital of a corporation, thus the total capital contribution includes a capital surplus
Private placement is not convenient for large-scale issuing and issuing shares through conventional underwriting is an expensive procedure. Furthermore we notice almost everywhere and everytime initial public offerings (IPO) are underpriced.
Shelf registration simplifies the procedures for issuing securities. It permits some eligible corporation to register an offering that is reasonably expects to sell within the next two years. It is less cosly than conventional underwriting, but few eligible companies sell their equity by using shelf registration
Right offerings are cheaper than general cash offers and eliminate the problem of underpricing. But most new equity issues are underwritten general cash offers, because it brings cash to the company.
Venture capital
A venture capitalist accepts to invest in the company (brings money and expertise), in exchange of a part of the capital. It is usually the early stage of young companies seeking to grow rapidly. The investment is provided by a few old-line families, angels (individuals with high income), and about 2000 venture-capital firms in the States. Western Europe is well behind and it virtually does not exist in Eastern Europe, with the exception of Hungary. About 2 % of requests actually receive financing.
Debts >>
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Corporate finance
The subject: corporate finance
PART ONE: CAPITAL EXPENDITURE
The present value
Investment
decisions
Practical
problems in capital budgeting
Firms evaluation
PART TWO. BASICS OF FINANCE
The financial
markets
Options
The market
efficiency
Risk
Mergers,
Acquisitions, and Corporate Control
International
Financial Management
PART THREE FINANCING DECISIONS
Corporate
financing
Dividend policy
and capital structure
PART FOUR FINANCIAL MANAGEMENT
Financial
planning
Short-term
financial management
Courses created and updated by Dr David Chelly, PhD in Management sciences from the University of Tours.
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